GIC to buy Indian renewable energy platform Greenko

A subsidiary of GIC affiliate Cambourne will pay approximately GBP162.8 million ($252 million) for all of the assets held by Greenko, which is listed on London's AIM market. Greenko CEO Anil Kumar Chalamalasetty and President Mahesh Kolli will continue to manage the business under the new ownership, according to a filing.

The major asset being sold is Greenko's Mauritius-based subsidiary through which it controls clean energy projects in India. As of December 2014, it had 258 megawatts of hydropower capacity in operation and 502 MW of wind power, as well as smaller amounts of biomass and natural gas capacity.

The company wants to reach 1,000 MW of operational capacity by the end of 2015 and has 187 MW of hydropower projects under construction and a further 669 MW in development, as well as 402 MW of wind capacity at an advanced stage of construction.

Greenko began trading on AIM in 2007 and was successful in raising equity capital on the market until 2012, since when its focus has been on raising growth capital at a subsidiary level.

TPG's growth arm committed $35 million to Greenko for a 10% stake in 2010 as part of a $116 million capital raise from a selection of institutional and other investors. Participants in the round included existing investors Global Environment Fund and Aloe Private Equity. While Aloe still had a 10.8% stake at the end of December, TPG has fully exited its holding.

In 2011, GE Energy Financial Services and Greenko agreed to invest $50 million and $65 million, respectively, to build wind farms in India. Contractual arrangements between GE and Greenko that enable the former to exit its interests in the project entity will revert to the Mauritius subsidiary.

GIC invested GBP100 million ($149 million) for a 19.5% stake in the Mauritius subsidiary in 2013. The Cambourne entity currently holds approximately 17.38% of the voting rights in Greenko Mauritius. Last October, Greenko Mauritius received $125 million from EIG, part of which was used to refinance a $70 million convertible debt facility provided by Standard Chartered in 2011. EIG's conversion rights will be cancelled and the investor will be redeemed.

Greenko said the decision to sell to GIC was based on a belief that the company's performance is not reflected in its share price, which is in part due to weak investor sentiment towards India and its energy sector. Shares have also been largely illiquid and the price sensitive to sales by shareholders.

Greenko is one of a handful of greenfield renewables platforms that have gained traction in India - with the support of private capital - and are gradually turning their big ambitions into meaningful scale. Others include ReNew Energy and Continuum Wind Energy. In developed markets, these platforms have also gone public as yieldcos that function much like real estate investment trusts (REITs).

Earlier this month, The Abraaj Group announced it would work with conglomerate Aditya Birla Group to build a renewable energy platform that will focus on developing solar power plants in India.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• Exits
• Buyouts
• South Asia
• Southeast Asia
• Cleantech
• Infrastructure
• Infrastructure
• Cleantech
• India
• buyout
• Exit
• GIC Private
• EIG Global Energy Partners