Backed by Singapore’s GIC and Abu Dhabi Investment Authority, Greenko,is set to announce its largest acquisition with the purchase of the solar and wind portfolio of Orange Renewables for an enterprise value of about $1 billion.
The formal announcement is expected on Monday. Following the takeover, Greenko and ReNew will be neck and neck in terms of total operating capacity of around 4.3 gigawatts (4,300 megawatts) and ahead of Tata Power, which generated a little over 2 GW from renewable energy.
Orange was put on the block around a year ago. Investment bank Rothschild represents the sellers. Greenko entered the picture after ReNew withdrew following initial talks. Hero Future Energies, Sembcorp India and PE fund Actis were said to be among the other contenders in the fray.
The average feed in tariff for the operating Orange portfolio is around Rs. 4-5 per unit. Of the 750 MW, 200 MW is solar and the rest is wind. The projects in the pipeline, mostly won through recent wind auctions, have an average tariff of Rs. 2.70 per unit. The projects have turnkey contracts with Gamesa and Suzlon. The solar foray has been more recent with a maiden project in Maharashtra as of now.
Hyderabad-based Greenko, which has raised more than $2 billion through equity and debt in the past 18 months, will be funding the acquisition through its internal reserves.