Clean energy developer Greenko will acquire Lanco's 70 MW hydel plant in Himachal Pradesh for about 77 million euros (Rs 650 crore), which would take its overall generation capacity to 546 MW.
London-listed Greenko would snap up the Budhil 70 MW hydro power plant in Himachal Pradesh and the project is also near the company's existing assets.
With the buyout, the entity said its total generating portfolio would increase to 546 MW.
"The total value of the acquired assets is approximately 77 million euros, funded in-line with the company's current portfolio from project finance debt and internal resources," Greenko said today in a filing to the London Stock Exchange.
At current exchange rate, the value would be about Rs 650 crore.
On Monday, Lanco Infratech, which is facing challenging business conditions, announced it would sell three hydel projects in Himachal Pradesh including the Budhil plant, to Greenko for an undisclosed amount.
Greenko today said the acquisition of two other projects -- IKU-2 and Baner-3 -- is expected to be completed later this year. Each has a generation capacity of 5 MW.
According to Greenko, Budhil project is expected to "deliver an average of approximately 14 million euros of EBITDA over the long term, based on current exchange rates".
Once final pro-forma approvals are received from the state and the banks, the company expects to recognise revenue from Budhil at the start of its 2014-15 financial year.
Post acquisition, Greenko would have 12 run-of-river hydel projects operating in its Himachal Pradesh cluster, totalling 141 MW.
Greenko CEO Anil Chalamalasetty said the deal is attractive for shareholders since it is immediately earnings accretive and offers strong returns.
"This acquisition, combined with the wind farms we expect to commission in the coming months, will take us to over 700 MW by the start of the 2014 monsoon, compared to 244 MW a year before," he noted.
The company said the transaction related to two other hydro projects is expected to be complete later this year.
