ReNew Power raises $265M from Abu Dhabi Investment Authority, others

Renewable energy producer ReNew Power Ventures Pvt Ltd said on Tuesday it has raised fresh capital from new and existing investors, taking the total funds secured so far to $655 million.

The firm raised $265 million (Rs 1,722 crore) in the fresh round led by Abu Dhabi Investment Authority (ADIA), which is one of the two sovereign funds of the UAE and represents the emirate of Abu Dhabi.

ADIA put in $200 million to pick up a significant minority stake while the rest came from existing investors.

Goldman Sachs, the original and now the lead investor, participated in its fourth round of funding in the company through an additional $50 million commitment, taking its total investment to $370 million. The investment bank had first invested in 2011 and took part in the consecutive investment rounds in 2013 and 2014.

Another existing investor, Global Environment Fund, will be adding up to $15 million to its existing investment, taking its total investment to $35 million.

ReNew will use the fresh funding for capital expenditure related to implementation of solar and wind projects.

The Indian government has set a target to achieve 100 GW of solar and 60 GW of wind power generation capacity by 2022

“We are at an inflection point where transformational use of natural resources will define our energy future. This fund raise comes at an exciting time for us as we enter a new phase of growth,” said Sumant Sinha, founder chairman and CEO at ReNew Power.

Sinha, a former deal-maker who also worked as COO of Suzlon Energy before venturing out, founded ReNew in 2011. He is also the son of former finance minster Yashwant Sinha and brother of current minister of state for finance Jayant Sinha.

The company has more than 1,600 MW of commissioned and under-construction clean energy assets. It has a development pipeline of more than 1 GW solar, wind and solar rooftop projects. It operates in eight states – Gujarat, Haryana, Madhya Pradesh, Rajasthan, Maharashtra, Karnataka, Telangana and Andhra Pradesh.

The company has Rs 4,000 crore of equity capital with over Rs 8,000 crore of debt sanctions. With this new round of funding, ReNew Power has an asset base in excess of $1.5 billion and expects to push this by a third by the end of this year.

Rothschild (India) advised ADIA on the investment.

Deal-making gains traction in renewable energy

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.

Last month, the Union Cabinet approved the National Offshore Wind Energy Policy. The policy paves the way for setting up of offshore wind power projects. Offshore wind energy is a major source of power in the developed world, especially Europe. The government estimates there is a potential of generating 106 GW power through offshore wind source on Gujarat's coastline alone and another 60 GW on Tamil Nadu's coastline.

A joint venture of Japan's SoftBank Corp, Taiwanese firm Foxconn and India's Bharti Enterprises plans to invest $20 billion in the Indian renewable energy sector

There have been a slew of deals in the renewable energy space in India this year. In May, Pune-based Simran Wind Project Pvt Ltd, a unit of Techno Electric and Engineering Company Ltd, sold 44.45 MW wind power assets in Tamil Nadu for Rs 215 crore (about $34 million) to an unnamed buyer.

In June, the world's largest renewable energy developer, SunEdison Inc, signed an agreement to buy Morgan Stanley Infrastructure Partners-controlled Continuum Wind Energy Ltd for an undisclosed amount.

In another development, PE firm Actis created an India-focused wind energy platform under Octro and committed $230 million investment in it.

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.

Two months later, UK's AIM-listed Indian renewable energy company Greenko Group plc signed a non-binding agreement to sell its entire stake in its Mauritius-based holding firm for Indian assets to Singapore's sovereign wealth fund GIC for £162.8 million ($255 million).

GIC is an existing investor in Greenko Mauritius, which also counts cleantech fund Global Environment Emerging Markets Fund III LP, among others, as private investors.

Last month, 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.

As first reported by VCCircle, wind turbine and solar inverter manufacturer ReGen Powertech is looking at funding for expansion and providing an exit to existing PE investors in the company.

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