Torrent in talks to buy ReNew’s clean power projects at $1.2 bn

Torrent Power Ltd is in talks to buy clean power projects totaling 1.1 gigawatts (GW) from ReNew Energy Global Plc at an enterprise value of about $1.2 billion, two people familiar with the development said.

Ahmedabad-based Torrent Power has submitted a non-binding offer (NBO) for ReNew's wind and solar power assets of 350 megawatts (MW) and 750MW, respectively, with an equity value of around $450 million. , the people cited above said on condition of anonymity, adding that discussions on valuation continue.

Torrent Power, one of India's largest integrated power companies with a presence in generation, transmission and distribution, has been active in India's green energy deal space and was previously in the fight for India's clean energy platform. of the US private equity firm Global Infrastructure Partners (GIP). Vector Green Energy, which was eventually bought by Singapore Sembcorp Industries Ltd..

while a Renew Energy Global Plc The spokesperson declined to comment, inquiries emailed to the Torrent Power spokesperson on Thursday night remained unanswered as of press time.

“ReNew has not designated any selling bank for this transaction. Valuation talks are underway between Torrent and ReNew,” said one of the two people quoted above.

mint reported on November 15 ReNew's plan to sell this operating clean energy capacity as part of the company's capital recycling strategy to reinvest proceeds in building new clean energy assets.

Torrent Power has a generation capacity of 4.16 GW, of which renewables represent 1,068 GW. The Torrent Group firm is also developing 715MW of renewable energy capacity. Torrent Power previously signed a deal with Lightsource Renewable Energy to purchase a 50MW solar power plant in Maharashtra. Torrent Power also supplies electricity to 3.94 million customers in Dadra and Nagar Haveli, Daman and Diu, Ahmedabad, Gandhinagar, Surat, Dahej Special Economic Zone, Dholera Special Investment Region, Bhiwandi, Shil, Mumbra, Kalwa and Agra.

Founded by Sumant Sinha in 2011, ReNew Power is among the earliest entrants in India's green economy. The company now has a portfolio of 13.4 GW with commissioned capacity of 7.7 GW. It recently partnered with Norway's state investment fund, Norfund, and KLP, Norway's largest pension company, to jointly invest in transmission projects. ReNew Energy Global Plc subsidiary ReNew Power Pvt. Ltd has also partnered with Elsewedy Electric SAE to establish an $8 billion green hydrogen plant in the Suez Canal Economic Zone.

Torrent Power is not averse to an inorganic route to grow your business. It had submitted the highest bid to acquire the electricity distribution business of Dadra and Nagar Haveli, and Daman and Diu as part of the Union Territories (UT) electricity distribution companies (discoms) privatization exercise. Torrent Power had also made a bid to acquire Chandigarh discom, in which Eminent Electricity Distribution Ltd, a subsidiary of Kolkata-based RP-Sanjiv Goenka Group company CESC Ltd, emerged as the highest bidder.

Deal activity in India's green energy space continues in the context of the world's largest energy transition exercise currently underway. Some of the offers, as reported mint, include Partners Group AG, a Swiss-based private equity (PE) firm's investment in rooftop solar firm Sunsure Energy for a majority stake; and Malaysia's Petronas, Singapore's Sembcorp Industries Ltd, JSW Neo Energy, global oil company BP Plc, Norway's state-owned power utility Statkraft and New York-based I Squared Capital are seeking to buy Continuum Green Energy (India) Pvt. Ltd in a deal with an enterprise value of about $1.5 billion.

In August 2021, ReNew Power merged with Nasdaq-listed special purpose acquisition company RMG Acquisition Corp. II (RMG II) to form ReNew Energy Global Plc, a new entity. As part of its growth strategy, ReNew has also joined AES and Siemens-backed Fluence to form an equitable joint venture for the energy storage business in India. It also partnered with the state Indian Oil Corp. Ltd. Y Larsen and Toubro to form a tripartite JV for green hydrogen in India.