Goldman Sachs, ADB & Global Environment Fund invest $140M in ReNew Power

The private equity arm of Goldman Sachs, regional development financial institution Asian Development Bank (ADB) and South Asian Clean Energy Fund, a PE managed by Global Environment Fund, have together invested $140 million (approximately Rs 835 crore) in ReNew Power Ventures, a renewable energy producer.

ADB, a multilateral finance institution that promotes economic and social progress in the Asia-Pacific region, has made an equity investment of $50 million; South Asian Clean Energy Fund, which is co-sponsored by Global Environment Fund and Yes Bank, invested $20 million and Goldman Sachs made an additional equity investment of $70 million.

This takes the total private equity funding in the company to $390 million (approximately Rs 2,158 crore) and the infusion will enable the company to scale up and more than double its clean energy portfolio from 460 MW to 1,000 MW by next year, the company said in a press statement.

“This investment comes at a time when there is a need to accelerate growth in the clean energy sector driven primarily by surging demand and the current energy deficit faced by the country. It puts us in a very comfortable position to select high quality projects, ensuring greater returns for our stakeholders,” says Sumant Sinha, chairman and chief executive at ReNew Power.

Sinha, former chief of Suzlon, had floated ReNew with the backing of Goldman Sachs a few years ago. The financial services giant owns majority stake in the company.

This is the third time private equity arm of Goldman Sachs has invested in the company. In 2011 it had put in around $160 million and followed it up with another $90 million a year later.

ReNew Power owns and operates 460 MW of renewable energy assets in five states (Gujarat, Haryana, Karnataka, Maharashtra and Rajasthan) across India. Additionally, it has a pipeline of another 500 MW, including a 50 MW solar project in Madhya Pradesh.

The company is implementing a data analytics and business intelligence platform, which will monitor its assets in real-time and perform online diagnostics to improve the overall wind farm performance.

ADB’s principal investment specialist Siddhartha Shah, said, “ADB’s investment is a signal to private sector companies that India’s renewables sector is ripe for further investment.”

Renewables’ share of India’s energy mix dropped from 44 per cent in 1970 to 31 per cent in 2011. To reduce dependence on imported fossil fuels and cut greenhouse gas emissions, the government has set a goal of maintaining renewables’ current share of installed capacity through to 2023.

In 2013, ADB invested $2.3 billion in clean energy and has pledged to continue investments of at least $2 billion per year.

The agency, which has been largely focused on supporting public sector projects in the country, has been active in making equity investments in private Indian firms of late. This deal marks its third 

back-to-back deal and the second in the renewable energy space.

Last month, ADB signed an agreement to make an equity investment of $50 million in Welspun Renewables Energy Ltd.

It also put in money in Bangalore-based Hippocampus Learning Centres Pvt Ltd, which offers education services to rural children.

(Edited by Joby Puthuparampil Johnson)

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