Orient Green to divest Maharashtra power project to Singapore’s Sindicatum

Chennai-based Orient Green Power Company Ltd, a public listed renewable energy firm of the Shriram Group, has agreed to divest entire stake holding in Orient Green Power (Maharashtra) Pvt Ltd to Singapore-based Sindicatum Captive Energy Singapore Pte Ltd, as per a stock market disclosure.

Financial details of the transaction, however, have not been disclosed.

The company has received approval from the Investment and Borrowing Committee to enter into a memorandum of understanding (MoU) with Sindicatum Captive Energy Singapore to divest the entire stake in Orient Green Power (Maharashtra) towards sale of 20 MW co-generation power project in Kolhapur, Maharashtra. The deal is subject to relevant approvals.

Headquartered in Singapore, Sindicatum finances and operates clean energy projects worldwide, and produces sustainable resources from natural products waste.

Orient Green Power was formed in 2006 as a joint venture between Shriram EPC and Bessemer Venture Partners which together put $20 million to start the venture. The company develops renewable energy power plants based on biomass, bio gas, wind energy and small hydel projects.

The firm started generating power in April 2008 after it acquired the first biomass plant in Kotputli, Rajasthan. It went public five years ago.

It also counts Olympus Capital Holdings Asia as a key shareholder. Besides holding direct stake, Shriram Group also owns a stake in a Singapore-based holding firm which is backed by both Bessemer and Olympus Capital. Olympus also owns a separate stake as a public institutional shareholder.

In August, the company received its board approval to raise Rs 100 crore ($15.3 million) from Edelweiss Group.

Renewable energy – especially wind and solar power – has attracted a clutch of financial and strategic investors, attracted by opportunities in a sector where the government has set ambitious targets to cater to the rising demand for electricity.

The Indian government has set a goal of achieving 100 GW of solar and 60 GW of wind power generation capacity by 2022, up from around 4 GW of solar and about 23 GW of wind today.

In September, Enel Green Power SpA (EGP) acquired a majority stake in BLP Energy, the wind and solar subsidiary of Bharat Light & Power Pvt Ltd for €30 million ($33.5 million, or Rs 221 crore). EGP is part of Italian power and gas company Enel spA.

Last month, Kumar Mangalam Birla-controlled diversified business conglomerate Aditya Birla Group and Dubai-based private equity firm Abraaj Group joined hands to build a large scale renewable energy platform focused on developing utility-scale solar power plants in India.

In June, Japanese internet and telecom major SoftBank Corp joined hands with Taiwanese design and electronics manufacturing services firm Foxconn Technology Group and India's Bharti Enterprises Ltd to form a joint venture for producing renewable energy in the country. The new venture, christened SBG Cleantech Ltd, envisages an investment of around $20 billion over a period of time.

There have been several deals in the wind power sector in the recent past.

This is not the first deal for Singapore’s Sindicatum Sustainable Resources Group (a global developer and operator of clean energy projects). In 2012, it acquired 49 per cent stake in a joint venture housing co-generation power assets of Delhi-based sugar refinery Simbhaoli Sugars Ltd.

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