ReNew Power in India is acquiring two assets with a combined enterprise value of INR28.5 billion (US$384 million), which are expected to generate INR3.8 billion to 4.0 billion (US$ 50.7 million to 53.4 million) of EBITDA annually.
ReNew will acquire L&T Uttaranchal Hydropower Ltd., which owns the 99-MW Singoli Bhatwari Hydroelectric Project (SBHEP), from L&T Power Development Ltd., a wholly-owned subsidiary of engineering and construction firm L&T. ReNew will add the project operations team of SBHEP to its team. This acquisition marks ReNew’s entry into the hydropower sector. The addition of SBHEP, which has a pondage capacity of two to three hours, adds 200 MWh to 300 MWh of low-cost hydro storage to ReNew’s portfolio.
SBHEP, on the Mandakini River in Rudraprayag district of Uttarakhand, became operational in December 2020 and is expected to have a residual life of nearly 35 years. As the project was commissioned after March 8, 2019, the power generated will facilitate recently notified hydro purchase obligations (HPO) compliance for the buyer.
Additionally, ReNew Power announced the signing of a definitive agreement to acquire 260 MW/330 MWp of operating solar projects in Telangana. The projects have a 25-year power purchase agreement (PPA) with Northern Power Distribution Company of Telangana Ltd. and Southern Power Distribution Company of Telangana Ltd. and have been operating for about four years.
The acquired assets are located close to ReNew’s existing solar projects in Telangana, which should offer opportunities to enhance productivity, reduce operations and maintenance costs, and utilize ReNew’s proprietary monitoring and analytical technology to further boost output, according to a press release.
“We believe that the acquisition of these assets is expected to earn an attractive return within our targeted range and is proof that ReNew is uniquely positioned to be a big beneficiary of the consolidation of renewable energy assets in India,” said Sumant Sinha, founder, chairman and chief executive officer of ReNew Power. “We are able to overlay our competitive advantages of scale, superior operations through vertical integration and utilization of our industry leading monitoring and analytics technology, financing innovation and access to low-cost capital to create significant value through acquisitions. Furthermore, the hydropower acquisition strengthens our ability to provide reliable and dispatchable power to the grid which complements our solar and wind assets. The acquisition of solar assets in Telangana and the hydropower project in Uttarakhand as well as the recent 200 MW MSEDCL auction win takes our commissioned and contracted capacity to well over 10 GW and sets us on the path to attain 18 GWs of capacity by 2025.”
ReNew is a renewable energy independent power producer that develops, builds, owns and operates utility-scale wind energy projects, utility-scale solar energy projects, utility-scale firm power projects, and distributed solar energy projects. As of March 31, 2021, ReNew Power had a total capacity of about 10 GW of wind and solar energy projects across India, including commissioned and committed projects from organic and inorganic growth opportunities.