ReNew to acquire two projects worth Rs 2,850 crore: To buy solar assets in Telangana & hydropower project in Uttarakhand

ReNew Power said on Wednesday that it has signed two separate binding agreements for the acquisition of a 99 mega-watt (MW) hydropower project in Uttarakhand and a 260 MW solar project in Telangana. The combined enterprise value of the acquisitions is around Rs 2,850 crore.

The 99 MW Singoli Bhatwari hydroelectric project will be acquired from Larsen and Toubro (L&T) for Rs 985 crore, and the deal will mark ReNew Power’s foray into the hydropower sector. Inclusion of hydro in the solar wind power producer’s portfolio is seen to give the firm access to low-cost source of electricity storage, which can act as a backup to balance the intermittency expected from traditional renewable electricity generation.

ReNew Power has an aggregate renewable energy capacity of more than 10 GW, out of which around 5.6 GW are currently operational. By FY25, the company intends to own 18 GW of renewable energy assets.

According to sources, the 260 MW Telangana solar assets are to be acquired from Acme Solar. The company has recently signed a power purchase agreement for round-the-clock (RTC) electricity supply with the Solar Energy Corporation of India. In order to supply power from the 400 MW RTC project at 80% utilisation rate, ReNew Power will set up around 900 MW of wind capacity and 400 MW of solar capacity, supplemented by battery storage, at an overall estimated project cost of around $1.2 billion.

“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,” Sumant Sinha, chairman and CEO of ReNew Power, said. The divestment of the hydro asset by L&T is in line with the company’s declared agenda of divesting non-core assets. “It represents our strategic effort to increase focus on our core strengths and exit others to move towards becoming a more asset-light organisation,” DK Sen, whole-time director of L&T, said.

Laying the groundwork for publicly listing itself in the US, ReNew Power has entered into an agreement with RMG Acquisition Corporation II (RMG II) which is a special purpose acquisition company (SPAC). After the expected closure of the transaction in Q3, 2021, ReNew will be listed on the Nasdaq.