ReNew Signs Deal to Sell 300 MW Solar Project to IndiGrid

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ReNew-clean-energy-deal-IndiGrid
Image Credits: renew.com

ReNew, a decarbonization solutions company in India, has revealed the signing of a Share Purchase Agreement with India Grid Trust for the sale of a 300 MW solar project in Rajasthan, namely ReNew Solar Urja Private Limited (RSUPL). The total enterprise value for this transaction is $199 million (Rs 1550 crore). As per the reports published ReNeW, the transaction reflects robust investor interest in ReNew’s developed assets and aligns with the company’s strategy to boost shareholder value by recycling capital and investing in opportunities with higher returns.

Kailash-Vaswani
Kailash Vaswani, Group CFO of ReNew (Image Credits: Kailash Vaswani/LinkedIn)

ReNew and IndiGrid are two of the players in India’s renewable energy sector. ReNew, founded in 2011, is an independent power producer committed to fostering sustainable energy solutions. With a diverse portfolio encompassing wind, solar, and hybrid projects, ReNew operates in enhancing India’s clean energy revolution. IndiGrid, also known as the India Grid Trust was established in 2016.

IndiGrid, on the other hand, is an infrastructure investment trust that owns a significant portfolio of power transmission assets. As one of the key players in India’s transmission sector, IndiGrid contributes in enhancing the reliability and efficiency of the country’s power infrastructure. Both of the companies are contributing to India’s green energy transition initiatives.

The completion of the transaction between ReNew and IndiGrid regarding this solar project deal is anticipated to occur in alignment with the conditions outlined in the Purchase and Sale Agreement (PPA). Following the initial payment received by RSUPL, it is anticipated that an additional sum of approximately $8 million will be realized as an earn-out, attributed to the change-in-law proceeds.

This supplementary amount is contingent upon meeting the specified conditions as stipulated in the agreement, as mentioned in the company’s official statement. Once the outstanding debt is seamlessly transferred to the buyer, this financial move is anticipated to yield a substantial cash inflow of around $82 million, inclusive of proceeds arising from changes in laws for ReNew.

Kailash Vaswani, Group CFO of ReNew, expressed the company’s vision to maintaining discipline in capital allocation and enhancing shareholder value through asset recycling. He mentioned that this affirms their ability to unlock value through the sale of assets and pursue more lucrative opportunities, with ongoing interest observed in the private markets for high-quality stabilized assets.

Incepted in December 2021, ReNew Solar Urja has been in operational status, forging a robust 25-year Power Purchase Agreement (PPA) with the Solar Energy Corporation of India (SECI) at an unswerving tariff of INR 2.71 per unit. Over the past two years, the project has seamlessly transformed into a revenue-generating entity, boasting a commendable net Plant Load Factor (PLF) of 27.42% during the 2022-23 timeframe. ReNew, a prominent player in the realm of decarbonization solutions, proudly graces the Nasdaq listing. The company’s vision extends to a formidable clean energy portfolio, with an impressive 13.8 GWs on a gross basis as of September 30, 2023.

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