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Greenko Group and Hero Future Energies Pvt. Ltd are in separate talks with Singapore-based AT Capital Group to acquire Orange Renewable’s portfolio of 758 megawatt (MW) capacity, several people aware of the development said.
New Delhi-based Orange Renewable, a unit of AT Holdings Pte. Ltd, owns one of India’s largest renewable energy platforms with an operational capacity of 758MW, made up of 567MW of wind projects and 191MW from solar plants.
Interest in the platform, founded by Arvind Tiku, an Indian-born Singapore resident, is explained in part by the fact that few Indian clean energy firms offer scale. In addition, while consolidation attempts are being made in India’s green energy space, deals are few and far between because of a mismatch between the expectations of buyers and sellers.
“There were earlier discussions with ReNew Power that didn’t reach fruition, post which both Greenko Group and Hero Future Energies are interested in Orange’s portfolio,” said a person aware of the development, requesting anonymity. These discussions comes after AT Capital Group’ differences over valuation with ReNew Power Ventures Pvt. Ltd for the same assets.
“Both Hero Future Energies and Greenko Group are interested in Orange’s assets. Rothschild has been given the mandate to find a buyer,” said another person aware of the development who also didn’t want to be identified.
The Economic Times reported on 19 July about ReNew Power being in active discussions with Orange Renewable to acquire its portfolio at an enterprise value of Rs6,175 crore.
“While there is considerable interest in the portfolio, it all depends upon whether it meets the expectations of AT Capital,” said a third person aware of the development requesting anonymity. AT Capital Group’s portfolio includes investments in real estate, hospitality, natural resources, renewable energy, engineering and construction.
Both Hyderabad-based Greenko Group and Hero Future Energies have ambitious plans for India’s emerging green economy.
Greenko, backed by Singapore’s sovereign wealth fund GIC Holdings Pte. and Abu Dhabi Investment Authority, is planning a $750 million equity investment for buying energy assets. It is exploring the acquisition of Gati Infrastructure Pvt. Ltd’s (GIPL) 110MW Chuzachen hydro-electric project in east Sikkim, Mint reported on 23 October.
Hero Future Energies, which is planning to put up a large grid-connected solar plant of up to 100MW capacity in South-East Asia, apart from expanding in Africa and India, plans to be present across the solar energy value chain.
A ReNew Power spokesperson in an emailed response said, “We would not like to comment on market speculation.” An Orange Renewable spokesperson in an emailed response said, “At this stage, we do not have comments. However, in future if there is any development with regards to this we will be pleased to share it with you.”
A Hero Future Energies spokesperson in an emailed response said, “The company will like to maintain its policy of not commenting on rumours except as required by law.” Queries emailed to Arvind Tiku and spokespersons for Rothschild and Greenko Group remained unanswered at press time.
The proposed deal comes at a time of declining green energy tariffs in India that have caused growing concerns that electricity off-take commitments from wind and solar projects at higher tariffs may not be honoured.
Also, the government is expediting the award of solar power contracts to help meet its 100 gigawatts (GW) capacity addition target by 2022.
India plans to invite bids for setting up 20GW of solar power capacity—the world’s largest solar tender—at one go, Mint reported on 10 November.
Ongoing deal activity in India’s clean energy space, as reported by Mint, includes Actis Llp exploring the sale of Ostro Energy Pvt. Ltd to ReNew Power, Subhash Chandra’s Essel Infraprojects Ltd mandating Investec to find a buyer for its solar business and Finland’s state-controlled power utility Fortum OYJ hiring Barclays Bank Plc. for a stake sale in its operational solar power projects in India.
Also, Canadian solar energy developer SkyPower Ltd has hired Yes Bank Ltd to sell a stake in its solar projects in India and diversified conglomerate Shapoorji Pallonji Group is in stake sale talks for its solar project portfolio.
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