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Ahead of SPAC vote, ReNew Power acquires 359 MWs of clean energy assets for $384 million

On August 6, Moneycontrol had reported that the US Securities Exchange Commission or SEC (the equivalent of India’s market regulator SEBI) had given the crucial regulatory nod to the mega $8 billion SPAC transaction between ReNew Power and RMG Acquisition Corporation II. The shareholder vote is pending for the deal post which the combined firm will start trading on the Nasdaq.

August 11, 2021 / 12:13 PM IST
Energy storage systems are emerging as one of the key solutions to effectively integrate high shares of solar and wind renewables in power systems worldwide. (Image Source: Shutterstock)

Energy storage systems are emerging as one of the key solutions to effectively integrate high shares of solar and wind renewables in power systems worldwide. (Image Source: Shutterstock)

Top renewable energy firm ReNew Power August 11 announced the acquisition of two assets in the hydropower and solar power segments with a combined enterprise value of $384.0 million, which are expected to generate $50.7–53.4 million of EBITDA annually.

On August 6. Moneycontrol had reported that the US Securities Exchange Commission or SEC (the equivalent of India’s market regulator SEBI) had given the crucial regulatory nod to the mega $8 billion SPAC transaction between ReNew Power and RMG Acquisition Corporation II. The shareholder vote is pending for the deal post which the combined firm will start trading on the Nasdaq.

 

In an official statement, the firm said it will acquire L&T Uttaranchal Hydropower., which owns the Singoli Bhatwari Hydroelectric Project (SBHEP), from L&T Power Development, a wholly-owned subsidiary of the engineering and construction firm L&T. As a part of the transaction, ReNew will add the project operations team of SBHEP to its team. This acquisition marks ReNew’s entry into the hydropower sector which is expected to play an important role in providing innovative renewable energy solutions for ReNew’s customers.

In a separate transaction, ReNew Power also announced the signing of a definitive agreement to acquire 260 MW/330 MWp of operating solar projects in Telangana. The projects have a 25-year PPA with Northern Power Distribution Company of Telangana (NPDCTL) and Southern Power Distribution Company of Telangana (SPDCTL) and have been operating for around 4 years.

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The addition of SBHEP, which has a significant pondage capacity of 2 – 3 hours, adds 200 – 300 MWhr of low-cost hydro storage to ReNew’s portfolio and beefs up ReNew’s position in storage and reliable power solutions.

SBHEP, situated on the Mandakini river in Rudraprayag district of Uttarakhand, was operationalised in December 2020 and is expected to have a residual life of nearly 35 years. This project is expected to have a net billed generation of 360 million units annually, or around a 50% PLF, and has a similar profitability profile as ReNew Energy’s current operating portfolio. As the project is commissioned after 8th March 2019, the power generated from this project will facilitate recently notified Hydro Purchase Obligations (HPO) compliance for the buyer, ReNew Power said.

On the other hand, the solar power assets are located close to ReNew’s existing solar projects in Telangana which should offer opportunities to enhance productivity, reduce operations and maintenance costs, and utilize ReNew’s proprietary monitoring and analytical technology to further boost output, the firm added.

Speaking about the acquisitions, Mr Sumant Sinha, Founder, Chairman and CEO of ReNew Power, said, “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. We are able to overlay our competitive advantages of scale, superior operations through vertical integration and utilisation of our industry-leading monitoring and analytics technology, financing innovation and access to low-cost capital to create significant value through acquisitions”

Sinha added, “ Furthermore, the hydropower acquisition strengthens our ability to provide reliable and dispatchable power to the grid which complements our solar and wind assets. The acquisition of solar assets in Telangana and the hydropower project in Uttarakhand as well as the recent 200 MW MSEDCL auction win takes our commissioned and contracted capacity to well over 10 GW and sets us on the path to attain 18 GWs of capacity by 2025.”
Ashwin Mohan
first published: Aug 11, 2021 12:13 pm

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