JERA picks up 10% in ReNew Power for $200 mn

Marking entry of Japanese strategic investors, deal takes ReNew's value to $2 bn

Japan’s JERA has picked up a 10 per cent stake in ReNew Power Ventures. The deal size is estimated to be $200 million, through subscription of newly issued shares.

This investment — taking ReNew’s value to $2 billion (Rs 13,400 crore) — marks the entry of Japanese strategic investors in the renewable energy market in the country.

JERA is a joint venture between two of Japan’s largest utility companies: Tokyo Electric Power Company and Chubu Electric Power. It currently operates approximately 6 GW of energy assets globally, across North America, West Asia and Southeast Asia.

SoftBank was the first Japenese firm to invest in the domestic clean energy space with its Indian venture SBG Cleantech.

“As a ReNew Power shareholder, we will seek to contribute to the company by making available technical, operational, project development, and management experience gained through our global power businesses,” said Yuji Kakimi, president of JERA.

ReNew Power is the first company in the country to cross 1 GW of commissioned wind energy capacity. ReNew also emerged as the largest winner in the auctions conducted by the Solar Energy Corporation of India, winning almost 10 per cent of the total capacity of 500 MW rooftop projects. The company has won the mandate to install 5 MW of renewable energy capacity across the country for the Indian Railways as well.

“The equity investment is for future projects. We would now build a pipeline based on it. Around 3 GW of renewable projects are already funded and we would like to add another 1 GW during this year. We are looking at quality projects for this,” Sumant Sinha, chairman and chief executive officer of ReNew Power, told Business Standard.

“We are open to acquiring operational assets as well. We keep looking at emerging options,” said Sinha.

ReNew Power Ventures, an independent power producer, has over 3,000 MW of commissioned and under-construction wind and solar capacities across Delhi, Gujarat, Haryana, Punjab, Madhya Pradesh, Rajasthan, Maharashtra, Karnataka, Telangana, Jharkhand, Uttar Pradesh, West Bengal, Tamil Nadu, Himachal Pradesh and Andhra Pradesh.

ReNew Power was launched in 2011. It recently secured long-term debt financing of $390 million from Asian Development Bank and LEAP. Sinha, however, said the company would now start preparing for an initial public offer (IPO), which would take another year.

Ankur Sahu, co-head of private equity in Asia at Goldman Sachs, said, “An investment from a preeminent organisation such as JERA is an important corporate milestone. From our first round of funding and starting the company just six years back, ReNew Power has successfully grown to become one of the largest, fastest-growing and well-funded renewable energy companies in the country.”