Gurgaon headquartered clean energy company ReNew Power today announced the acquisition of Ostro Energy Private Limited to create the country’s largest clean energy firm by installed capacity.
The acquisition is also touted as biggest ever deal in the Indian renewable energy sector, ReNew Power will spend Rs10,200 crore (approximately $1.5 billion) for the acquisition, backed by Rs1,643 crore ($247 million) from the Canada Pension Plan Investment Board (CPPIB).
This strategic investment helps ReNew Power further consolidate its position in the fast-growing, Indian clean energy sector. ReNew Power currently has green energy assets of more than 4500 MW, which include a commissioned capacity of approximately 2800 MW. Ostro Energy has a total capacity of more than 1100 MW, out of which nearly 850 MW is already commissioned. With the acquisition of these assets, ReNew Power’s capacity will now exceed 5600 MW. Over 65% of the combined portfolio capacity (ReNew Power and Ostro Energy) is already operational.
ReNew Power’s growth has been mostly organic till now and it has grown into one of the leading energy companies in India in a span of seven years. This is the largest acquisition for the company till date and reinforces its already strong position in the Indian market.
The addition of the Ostro team and assets to the ReNew family will further strengthen the company’s vision of contributing to the Government of India’s 2022 goal of 175 GW of renewable energy, said the company in a press release. Ostro has built an impressive business with diversified geographical spread; good quality infrastructure; and stable long term PPAs.
Delhi-based Ostro Energy’s assets are spread across Andhra Pradesh, Karnataka, Telangana, Rajasthan, Madhya Pradesh and Gujarat. The Ostro portfolio is also diversified by off takers and also by OEMs, further complementing the ReNew Power portfolio.
Concurrent with this transaction, Canada Pension Plan Investment Board (CPPIB) is investing an additional US$247 million to support ReNew Power’s financing for this acquisition. As a result, the CPPIB’s combined investment in ReNew Power now stands at US$391 million, following an earlier investment of US$ 144 million in January 2018.
Founded in 2011 by Sumant Sinha — an Ex-COO at Suzlon Energy, Renew Power is backed by investors such as Goldman Sachs, Asian Development Bank, Abu Dhabi Investment Authority, Global Environment Fund and Japan’s JERA Co. Inc. In February 2017, Japan’s JERA Co. Inc. bought a 10% stake in ReNew Power, valuing the company at $2 billion. Last year, Renew Power was among 10 most funded startups in India.
The above development was first reported in Qz.com
Startup activities in clean energy segment –
This February, Tata Trusts’ Foundation for Innovation and Social Entrepreneurship (FISE) has announced the “Social Alpha Energy Challenge” to discover next-gen technology innovations that promise to unlock new solutions to India’s energy challenges or make existing energy networks smarter, cleaner and more affordable. In the same month, three Indian startups won top awards at Global Cleantech Innovation Award.
Last June, Carbon Masters, a Bangalore based energy startup raised an undisclosed amount from Indian Angel Network and Sangam Ventures, a pure play clean tech venture fund. Later in July, solar startup CleanMax Solar raised $100 million from an affiliate of Warburg Pincus, a global private equity firm focused on growth investing.