ReNew Power Buys 359 MW Hydro, Solar Projects for about Rs 2,850 Cr

In line with its expansion strategy, ReNew Power has acquired two renewable energy assets with a combined enterprise value of Rs 2850 crore (US$384 million).

August 11, 2021. By Manu Tayal

In line with its expansion strategy, ReNew Power has acquired two renewable energy assets with a combined enterprise value of Rs 2850 crore (US$384 million).

These assets are expected to generate Rs 380 – 400 crore (US$ 50.7 – 53.4 million) of EBITDA annually.

The assets include - 99 MW run of the river Singoli Bhatwari Hydroelectric Project (SBHEP) from Larsen & Toubro’s subsidiary L&T Uttaranchal Hydropower Ltd (LTUHPL), while 260 MW/330 MWp of operating solar projects in Telangana.

As part of the acquisition transaction, ReNew will add the project operations team of SBHEP to its team, and marks it’s entry into the hydropower sector.

Last year, ReNew won two projects including a Peak Power (PP) Project as well as a Round-The-Clock (RTC) Power Project for which ReNew signed a Power Purchase Agreement (PPA) last week.

ReNew Power said that, the addition of SBHEP, which has a significant pondage capacity of 2 – 3 hours, adds 200 – 300 MWhr of low-cost hydro storage to it’s portfolio.  This further extends the company’s leadership 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 March 8, 2019, the power generated from this project will facilitate recently notified Hydro Purchase Obligations (HPO) compliance for the buyer.

Besides, ReNew Power’s 260 MW/330 MWp operating solar projects in Telangana have a 25-year PPA with Northern Power Distribution Company of Telangana Ltd (NPDCTL) and Southern Power Distribution Company of Telangana Ltd (SPDCTL) and have been operating for around 4 years.

Also, the acquired 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 it’s proprietary monitoring and analytical technology to further boost output.

Commenting on the acquisitions, 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. 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.”

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