GIC, ADIA invest $329 million more in Greenko

Industry:    July, 2019

A month after securing a $495-million equity commitment from existing investors GIC of Singapore and Abu Dhabi Investment Authority (ADIA), Greenko Energy Holdings has received another $329 million of funding at a $6.5-billion enterprise valuation through a rights issue.

With this round, the two principal investors would have cumulatively deployed $2.3 billion in equity till date.

The funds will be predominantly used to facilitate Greenko’s ongoing 2.4GW storage projects and acquisitions.

Greenko has also issued warrants to its founders, which will bring in additional equity for the growth of the company when they are exercised over coming months. With these proposed investments, the company’s business plan will be fully funded for two years.

“Indian energy markets are transitioning from deficit markets to demand-driven contracts, requiring reliable, flexible and cost competitive energy,” said Anil Chalamalasetty, managing director of Greenko.

The storage projects, with a total capital outlay of $2 billion, are expected to be completed and become operational in 2022. Greenko has also secured financial closure for the Pinnapuram storage project and is in advanced discussions for the Saundatti project. Greenko is India’s largest renewable player with 4.2 GW operational capacity. Another 7 GWs are under construction.

The focus on storage is part of Greenko’s pivot from a generation-focussed company to a more holistic solutions provider, striving to feed peak grid demand through clean energy sources. In India, with increase in renewable energy supply from a variety of new sources, existing grid infrastructure cannot absorb more than 15% of supply. Coal, the dominant source of power in the country, cannot satisfy demand that peaks in summer. Renewable supply also remains unpredictable, being dependent on the vagaries of nature.

GIC will continue to remain the principal shareholder of the company after this fresh round of capital infusion.

This will be the fourth round of capital infusion by the two, making the Hyderabad-based company the biggest recipient of foreign capital in the clean energy space in the country.