Greenko Group is looking to acquire hydro and wind power producer Bhoruka Power Corp. Ltd’s renewable energy portfolio of 310 megawatts (MW).
L&T Infrastructure Finance Co. Ltd holds an equity stake worth Rs350 crore in Bhoruka Power, which currently operates 110MW of hydropower capacity, 170MW of wind capacity and 30MW of solar capacity in Karnataka, Rajasthan and Haryana, and is building a 200MW wind farm in Karnataka.
This comes against the backdrop of Greenko Energies Pvt. Ltd, backed by Singapore’s sovereign wealth fund GIC Holdings Pte. and the Abu Dhabi Investment Authority (ADIA), acquiring SunEdison’s Indian assets for $392 million last year.
“Greenko is exploring to acquire Bhoruka Power’s portfolio,” said a person aware of the development, requesting anonymity. Another person, who also declined to be named, confirmed the development.
Mint reported on Wednesday that Bengaluru-based Bhoruka is planning to raise about $120 million in equity, citing its managing director, S. Chandrasekhar.
While Mahesh Kolli, Greenko Group’s founder, president and joint managing director, declined to comment, Chandrasekhar said the information is “incorrect”.
India’s demand for green energy is expected to grow sevenfold by 2035, according to the latest BP Energy Outlook released in January. Accordingly, the share of renewable energy in the country’s fuel mix will rise to 8% in 2035 from the current 2%.
A spokesperson for ADIA asked Mint to get in touch with Greenko. Queries emailed to the spokesperson for GIC Holdings on 7 March remained unanswered. Also, a Larsen and Toubro spokesperson didn’t respond to queries emailed on Saturday.
Wind and solar power tariffs have hit an all-time low of Rs3.46 per kilowatt-hour (kWh) and Rs2.97 per kWh, respectively. The government plans to achieve 175 gigawatts (GW) of renewable energy capacity by 2022 as part of its commitments to the Paris climate change agreement.
Experts expect more consolidation to happen in the sector.
“With the promising outlook on growth of renewables given the focus on climate change, sustainability and breakthrough technologies, serious players would be keen to scale up operations and building a sustainable business model with a portfolio of contracts across various utilities, customer segments, power purchase agreement tenure and rates,” said Sambitosh Mohapatra, partner, energy, at PwC India.
India is targeting a capacity of 100GW of solar energy and 60GW of wind energy by 2022. This has given rise to new entrants and investors and triggered mergers and acquisitions, even as the thermal power sector remains weighed down by stressed assets.
Some of the investors attracted by India’s clean energy sector include Japan’s Mitsui Group and CDC Group Plc, the UK government’s development finance institution, with Japanese firm JERA Co. Inc. acquiring a 10% stake in ReNew Power Ventures Pvt. Ltd last month for $200 million.
Also, in an indication of growing consolidation in the Indian wind energy sector, Ravi Jhunjhunwala’s LNJ Bhilwara Group has put up its wind energy portfolio for sale and hired Yes Bank Ltd to conduct the process.
Other recent large deals in the clean energy space include Tata Power Co. Ltd buying Welspun Energy Ltd’s entire 1.1GW renewable energy portfolio for $1.4 billion.