Singapore’s GIC, ADIA put $495 million in fresh funding for Greenko’s 2.4 GW power storage projects
The fund raising is predominantly to facilitate 2.4GW of storage projects.
Mumbai: Existing sovereign wealth fund investors GICNSE -1.30 % of Singapore and Abu Dhabi Investment Authority (ADIA) are deploying $495 million in fresh equity funding in Greenko. The definitive agreements are getting signed later today.
The fund raising is predominantly to facilitate 2.4GW of storage projects. These projects, with a total capital outlay of $2 billion, are expected to be completed and operational in the year 2022. These projects will have overall capital outlay of US$ 2 billion. Greenko has also secured financial closure for the Pinnapuram Storage Project and are in advanced discussions for the Saundatti Project. The company has already secured financial closure for the Pinnapuram Storage Project and are in advanced discussions for the Saundatti Project.
“The proposed equity commitment from the existing shareholders shows Greenko’s track record in creating long-term value to all its stakeholders,” said Anil Chalamalasetty, Managing Director and Chief Executive Officer, Greenko.
The Indian energy markets are transitioning from deficit markets to demand-driven contracts, requiring reliable, flexible and cost competitive energy, he said and added Greenko is “focussing in building integrated renewable energy assets with storage to address these markets by competing with conventional energy assets like thermal in quality, quanity and cost.”
This is part of Greenko’s pivot from a generation-focussed company to a more holistic solutions provider striving to feed peak grid demand through clean energy sources. In India, with increase in renewable energy supply from a variety of new sources, existing grid infrastructure cannot absorb more than 15 per cent of supply. Coal, the dominant source of power in the country, cannot satisfy demand that peaks in summer.
Renewable supply also remains unpredictable, being dependent on the vagaries of nature.
GIC will continue to remain the principal shareholder of the company after this fresh round of capital infusion. This will be the third round of capital infusion by the two, making the Hyderabad-based company the biggest recipient of foreign capital in the clean energy space in the country.
After this, the two principal sponsors of the company would have put a total $2 billion in the 13-year-old company, with GIC, the largest shareholder with a 60 per cent stake, alone infusing $1.4 billion. With $3.2 billion of debt, Greenko’s enterprise valuation is expected to be at $5.2 billion.
ET wrote about the impending fund raising in its February 21st edition.
“Greenko, is well-positioned to execute the Integrated Renewable Energy projects,” said Ang Eng Seng, Chief Investment Officer of Infrastructure at GIC. “Its innovative use of hydro storage and renewable power will enable utilities to mitigate the intermittency issues of renewable power, facilitate the increased penetration of renewable power and reduce the country’s reliance on conventional thermal power over time.”
Greenko, among the country’s top renewable energy companies has operational capacity of over 4.2 GW (DC Capacity of 4.7 GW) diversified across wind, solar and hydro projects.
Set up in 2006 by first-generation entrepreneurs Mahesh Kolli and Anil Kumar Chalamalasetty, Greenko has a pan India footprint of 13 states and an expected Ebitda (earnings before interest, tax, depreciation and amortisation) of $500 million. The founders own a quarter of Greenko, and ADIA, the remaining 15 per cent.
GIC is a leading global investment firm with well over US$100 billion in assets under management.
Existing investors of Renew Power, Goldman Sachs, ADIA, CPPIB are also infusing another round of $300 million financing through a combination of equity and debt, ET reported last week.
Source: economictimes.indiatimes
