Renew Power enters hydropower sector with acquisition of a 99 MW project
- The acquisition of Singoli-Bhatwari hydropower project will strengthen the company's ability to provide round-the-clock power to the grid, said Sumant Sinha
- We will be looking to acquire more hydropower assets in future as they are the best clean balancing sources for intermittent renewable energy, Sinha added
Mumbai: Making an entry into the hydropower sector, Renew Power has signed a deal to acquire L&T's Uttarakhand-based run-of-the-river Singoli-Bhatwari Hydroelectric Project (3×33 MW) owned by its subsidiary L&T Uttaranchal Hydropower Limited (LTUHPL). The transaction is subject to the completion of customary closing conditions and closing is expected to take place before September 30 this year. The sale consideration is Rs 985 crore, said L&T in a regulatory filing to the stock exchanges.
Renew Power to acquire more hydropower projects in future
Commenting on the acquisition, Sumant Sinha, Chairman and CEO of Renew Power, said that the acquisition will strengthen the company's ability to provide round-the-clock power to the grid. He also said that Renew Power will be looking to acquire more hydroelectric projects in the future. "Given that the asset is already operational, the acquisition is not only value accretive for us but also presents a lower level of risk. It strengthens our ability to provide firm and round the clock power to the grid and compliments our solar and wind assets, filling up an important position in our portfolio. We will be looking to acquire more hydropower assets in future as they are the best clean balancing sources for intermittent renewable energy," said Sinha.
Renew Power to acquire 260 MW solar projects in Telangana
In a separate transaction announced on Wednesday, Renew Power is also set to acquire 260 MW/330 MWp of operating solar projects in Telangana. The projects have a 25-year PPA (power purchase agreement) 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. 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 utilise ReNew's proprietary monitoring and analytical technology to further boost output, said an official statement.
"In line with its strategy of organic and inorganic expansion, ReNew Power announced the acquisition of two assets with a combined enterprise value of Rs 28.5 billion (USD 384.0 million), which are expected to generate Rs 3.8-4 billion (USS 50.7-53.4 million) of EBITDA annually," said the statement. The two acquisitions announced by Renew Power are valued at Rs 2,850 crore.
Renew Power had won two projects — a Peak Power (PP) project and a Round-The-Clock (RTC) power project — for which it signed power purchase agreement last week. The PPA for round-the-clock electricity supply was the first-of-its-kind in India. The PPA was signed with Solar Energy Corporation of India (SECI) and requires Renew Power to supply electricity in the first year at Rs 2.90/kWh. This will increase by 3 percent a year for the first 15 years after which it will remain flat for the remaining 10 years of the 25-year contract. Renew Power has said that hydropower will play an important role in providing renewable energy solutions for the intermittency of solar and wind power projects for its customers.
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