ReNew Power Acquires Solar Assets in Telangana and Hydropower Project in Uttarakhand Worth $384 million

Gurgaon, India – ReNew Power, India’s leading renewable energy company, sign binding agreements for the acquisition of two operating portfolios: a 99MW hydropower project in Uttarakhand and a 260MW/330MWp solar project in Telangana, as part of its organic and inorganic expansion strategy. The combined enterprise value of the acquisitions is around INR 2850 crore ($384.0 million), which are expected to generate INR 380-400 crore ($50.7-53.4 million) of EBITDA annually.

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

ReNew has been a pioneer in providing firm renewable energy solutions that address the intermittency of standard solar and wind projects. Last year, the company won two such projects: a Peak Power (PP) Project and a Round-The-Clock (RTC) Power Project, for which it signed a Power Purchase Agreement (PPA) last week. SBHEP adds 200-300 MWhr of low-cost hydro storage to the company’s portfolio, with a significant pondage capacity of 2-3 hours. This strengthens the company’s position as a leader in storage and reliable power solutions.

SBHEP, located on the Mandakini River in Uttarakhand’s Rudraprayag district, began operations 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 per year, or a PLF of around 50 percent, and a similar profitability profile as ReNew Energy’s current operating portfolio. As the project is commissioned after March 8, 2019, the power generated will facilitate recently notified Hydro Purchase Obligations (HPO) compliance for the buyer.

ReNew Power also announced the signing of a definitive agreement to acquire 260 MW/330 MWp of operating solar projects in Telangana in a separate transaction. The projects have a 25-year power purchase agreement (PPA) with Northern Power Distribution Company of Telangana Ltd (NPDCTL) and Southern Power Distribution Company of Telangana Ltd (SPDCTL) and have been in operation for about 4 years. The acquired assets are close to the company’s existing solar projects in Telangana, which should provide opportunities to boost productivity, reduce operations and maintenance costs, and use its proprietary monitoring and analytical technology to boost output even further.

The acquisition is expected to generate an attractive return within the company’s target range and demonstrates that the company is uniquely positioned to be a big beneficiary of the consolidation of renewable energy assets in India, Sumant Sinha, Founder, Chairman and CEO, ReNew Power, added, “We are able to overlay our competitive advantages of scale, superior operations through vertical integration and utilization of our industry-leading monitoring and analytics technology, financing innovation and access to low-cost capital to create significant value through acquisitions. 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.”

Image Source: ReNew Power Pvt Ltd