Goldman invests $135m in ReNew Wind Power

Following the first funding round, ReNew commissioned its first 25.2 MW wind farm in the state of Gujarat in March, 2012. The project has a power purchase agreement with state utility Gujarat Urja Vikas Nigam for 23.1MW with the remaining 2.1MW to be sold to Philips India.

As of April 30 this year, the power producer has an installed wind power portfolio of 200 MW and is acquiring land parcels with wind potential across India with intent to develop wind power farms in the next couple of years.

It plans to develop 1 giga watt of renewable energy projects by 2015. The target is shared by another Indian power generator, NSL Renewable, which raised $95 million this year for its wind and hydropower projects.
Last year, Morgan Stanley Infrastructure Partners bought a majority stake in Continuum Wind Energy for INR12 billion ($210 million).

India's wind energy sector is said to have seen 30% annual capacity growth in the last decade and now has the world's fifth-largest installed capacity, at 16,000 MW. According to the Indian government, renewable energy capacity will need to be at least 70,000MW out of its total capacity of 455,000MW by 2022.

The International Energy Agency has forecast that India's energy consumption will more than double by 2035.

Goldman also announced last month that it plans to invest as much as JPY50 billion ($487 million) in renewable energy projects over the next five years through its Japan Renewable Energy unit. This will help fund as much as JPY300 billion in clean energy projects.

The firm will put JPY13 billion into a solar project in Ibaraki Prefecture, north of Tokyo, which is due to start operation in January 2015.

It will have a power generation capacity of 40 megawatts and the electricity generated will be supplied to Tokyo Electric Power over a span of about 20 years.

Energy production shortages in Japan and India, and new feed-in tariffs that guarantee the price paid for renewable electricity are expected to boost investment in renewables.

"All these factors play into being in power generation more than in the suppliers," Ankur Sahu, co-head of private equity in Asia at Goldman Sachs told the Financial Times. "We feel that generation is certainly the more interesting place to be."

Both ReNew and JRE investments will use borrowings of about three times the equity value to fund projects.

This is Goldmans' third investment in India this year - it committed INR1.1 billion ($20 million) to BPL Medical Technologies and INR6 billion ($110 million) in cable TV distributor DEN Networks.

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