ReNew Power Ventures has acquired Ostro Energy in what has been dubbed India’s largest renewable energy deal by media reports. The deal is reported to worth more than 100 billion rupees (approximately $1.54 billion), reports Bloomberg citing unnamed sources in the know. That this acquisition was in the works first became public news in late 2017.
Ostro Energy's assets are spread through Andhra Pradesh, Karnataka, Telangana, Rajasthan, Madhya Pradesh and Gujarat. "The Ostro portfolio is also diversified by off takers and also original equipment manufacturers, further complementing the ReNew Power portfolio," ReNew had said in a statement to PTI.
Ostro Energy is funded by private equity investor Actis Capital and ReNew is reported to have paid for 40 percent of the equity and the rest coming in as debt to complete the deal. According to leading media outlets, ReNew reps have declined to comment on the deal value.
"This strategic investment helps ReNew Power further consolidate its position in the fast-growing, Indian clean energy sector," the company said in a statement reported by PTI.
ReNew Power has investors Goldman Sachs Group, Jera based in Japan, the Abu Dhabi Investment Authority and the Canada Pension Plan Investment Board (CPPIB). This is touted to be the largest renewable energy company in India after the acquisition with combined assets exceeding 5.6 gigawatts.
Currently ReNew has assets of more than 4,500 MW, which include a commissioned capacity of around 2,800 MW, while Ostro Energy has a total capacity of more than 1,100 MW, out of which nearly 850 MW is already commissioned. As reports put it, ReNew Power, over 65 percent of the assets of the total entity are already in operation.
In addition the Canada Pension Plan has injected another $247 million to support finance ReNew’s bid to acquire the Ostro Energy acquisition bringing the CPPIB’s total investment in ReNew Power to $391 million. It was only earlier this year that $144 million had been first invested in ReNew according to the company.
In addition, “ReNew Power's growth has been mostly organic till now. This is the largest acquisition for the company till date and reinforces its already strong position in the Indian market," a company statement had said.
Before this deal became the largest clean energy deal in India, the record was held by Tata Power for its acquisition of Welspun Renewable Energy in 2016 which amounted to an enterprise value of 92.49 billion rupees ($1.4 billion)
India aims to install 175 gigawatts of renewable energy capacity by 2022, deals like this and the other large solar deal announced, the one by a Chinese energy conglomerate named Golden Concorde Group and the SoftBank Group to a $930 million joint venture to produce and sell solar equipment in India will bolster the country’s renewable energy production goals.