Japan’s JERA acquires 10% stake in ReNew Power for $200m

Solar Panels. Photo: Mint

As part of Japans’s attempt to engage with India’s green energy space, JERA Co., Inc. (JERA) has become an anchor investor in ReNew Power Ventures Pvt. Ltd before the proposed initial public offer (IPO) of the firm backed by Goldman Sachs and the Abu Dhabi Investment Authority (ADIA).

“JERA has acquired 10% stake in ReNew Power for $200 million valuing the company at $2 billion,” said Sumant Sinha, chairman and chief executive officer of ReNew Power at a press conference in New Delhi.

Set up in 2015, JERA is the equal joint fuel venture between Japan’s largest utility Tokyo Electric Power Co. (TEPCO) and Chubu Electric Power Co.

This comes in the backdrop of ReNew Power initiating discussions with investment banks for an IPO.

JERA’s portfolio of overseas power projects include plants in Thailand, Indonesia, Vietnam, Philippines, Taiwan, Qatar, Oman, United Arab Emirates, US, Canada and Mexico.

According to information available on JERA’s website, the management goals section states, “Overseas, we will be actively involved in power generation infrastructure projects in rapidly growing emerging countries with the goal of increasing revenue.”

Apart from Goldman Sachs, other investors in ReNew Power include the Asian Development Bank (ADB) and Global Environment Fund.

ReNew Power has secured long-term $390 million debt funding from existing investor ADB. In addition, it has also raised $250 million from OPIC and is in the process of raising $475 million through a masala bond.

A chief executive of a lending firm with exposure to the clean energy projects requesting anonymity said, “Till now the Indian renewable energy play was backed by private equity investors. As the sector matures we will be witnessing interests from all quarters.”

In India, which is the biggest greenhouse gas emitter after the US and China, renewable energy currently accounts for 15%, or 45,917 MW, of the total installed capacity of 3,10,005 MW.

ReNew Power has 3.2 gigawatt (GW) of operational and under construction capacity from its own wind and solar projects. It has set a target of over 11 GW of wind and solar power capacity over the next five years.

India plans to achieve 175 GW of renewable energy capacity by 2022 as part of its climate commitments; wherein it has promised to achieve 40% of its electricity generation capacity from non-fossil fuel based energy resources by 2030. This includes 60 GW from wind power, 100 GW from solar power, 10 GW from biomass and 5 GW from small hydro projects.

Also read:

India: Sumant Sinha in talks for $100m funding to hike ReNew Power stake

India: RBI faces dilemma on masala bonds over Goldman-backed ReNew Power issue

This story was first published on Livemint