Tata Power acquires Welspun's renewable energy assets

The deal estimated at Rs 10,000 crore for 1,140 Mw of assets is the largest in the segment

Tata Power has acquired the renewable energy (RE) subsidiary of Delhi-based Welspun Energy. It is estimated to be a Rs 9,900-crore deal.

Tata Power’s subsidiary, Tata Power Renewable Energy Ltd (TPREL), signed a share purchase agreement with Welspun Energy to acquire Welspun Renewables Energy Pvt Ltd (WREPL).

“This represents the largest transaction in renewables in India,” said Tata Power. It did not disclose the deal size and the seller made no comment. Welspun Energy is itself a subsidiary of the Mumbai-based Welspun Group, a multinational corporation with interests in energy, steel and textiles.

The portfolio Tata has bought comprises 990 Mw of solar power projects and about 150 Mw of wind power projects. Of this, 1,000 Mw is operational and the rest in “advanced stages of execution”, said Tata Power.

The assets of Welspun Energy have been on the block for a year; this newspaper had reported last year about companies being interested in buying. Japan’s SoftBank, on these, dropped out, as did Hero Future Energies and ReNew Power, said senior executives.

After the new purhase, TPREL would have an RE portfolio of 2,300 Mw, making it the largest such in this segment, in India. It had till now  294 Mw of capacity; another 500 Mw of assets were being carved out of Tata Power through a court process. And, almost 400 Mw of solar and wind power projects are under implementation, the company said.

“Most of the assets (acquired from Welspun) are revenue generating and operating ones,” it said.

“(We) can further enhance the value of these, with (our) operational experience and financialoptimisation. This is also a significant step towards (our) objective of having non-fossil fuel-based capacity up to 30-40 per cent of total generating capacity,” said Anil Sardana, managing director, Tata Power.

In an earlier interview with this paper, Sardana had said the company would participate more in the growing cleaner energy sector via acquisitions than bidding.

“The only investment that has really gone well in India is renewables. In the past five years, we have been one of the large renewable (energy) companies in India. We are a good participant in (this) and will continue to do that,” he’d told Business Standard.

WREPL has one of the largest operating solar energy portfolios in India, across 10 states.

It had got institutional funding from across the globe for some key projects. General Electric made its first Indian solar energy investment in the company, funding $24 million at a Neemuch, Madhya Pradesh-based 151 Mw  project. The Asian Development Bank also made its first equity infusion in India as part of a $50-mn commitment into the company.
POWER PURCHASE
Tata Power Renewable Energy has acquired Welspun Renewables Energy:

DEAL SIZE:
Estimated at more than Rs 9,500 crore or $1.4 bn (according to market estimates)

ON THE BLOCK:

Includes portfolio of 1,140 Mw — of which 990 Mw is solar and 150 Mw of wind projects

POWER BOOST:
Tata Power is now the largest player in renewable energy space with 2,300 Mw

OTHER PREVALENT PLAYERS:
Hero Future Energies
380 Mw

ReNew Power
1,000 Mw

SunEdison
1,480 Mw