India's PE-backed ReNew raises $200m from Japan strategic
Indian PE-backed renewable energy producer ReNew Power Ventures has raised $200 million from Japanese energy producer JERA.
JERA will take a 10% stake in ReNew through a fresh issue of shares, giving the company a valuation of $2 billion, according to a statement. ReNew will use the new capital to support its domestic expansion plans, with JERA also providing technical, operational and management guidance based on its experience with global power project development.
The deal represents the first investment in India’s energy sector by JERA, which was formed in 2015 as a joint venture between Tokyo Electric Power Company and Chubu Electric Power Company. It manages a portfolio of power projects across Asia, the Middle East and North America, along with interests at various stages of the energy value chain including coal and liquid natural gas procurement and transportation.
Founded in 2010, ReNew is India’s leading renewable energy independent power producer, with 1.5 gigawatts of wind and solar power projects commissioned and another 1.8 GW under construction across the country. It hopes to reach a total capacity of 11 GW in the next five years.
The company has had PE support nearly from the beginning, with Goldman Sachs committing INR10 billion ($202 million) in 2011. Goldman has continued to back ReNew through several subsequent rounds, including a $140 million investment in 2014 alongside the Asian Development Bank (ADB) and Global Environment Fund (GEF) and a $265 million round with the Abu Dhabi Investment Authority and GEF in 2015. ReNew has also raised debt funding, with a $250 million commitment from the Overseas Private Investment Corporation in March 2016 and a $390 million financing from ADB last month.
India’s government has set ambitious targets for renewable energy, committing the country to generate 175 GW of solar, wind and other renewable resources by 2022. Several private investors have a presence in the space as well: Singapore sovereign wealth fund GIC Private paid GBP162.8 million ($252 million) for renewable energy platform Greenko in 2015 and committed another $230 million alongside ADIA last year, while Tata Power acquired ADB and DEG-backed Welspun Renewables for INR92 billion in June.
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