ReNew Power, India’s biggest renewable power producer, is nearing an agreement to merge with blank-check company RMG Acquisition Corp. II, according to people familiar with the matter.
The deal would give Goldman Sachs Group Inc.-backed ReNew an enterprise value of $8 billion, said the people, who asked not to be identified because they weren’t authorized to speak publicly.
An $855 million private placement to support the transaction is being raised from investors including serial dealmaker Chamath Palihapitiya, TT International Asset Management, a fund managed by BNP Paribas SA, funds and accounts managed by BlackRock Inc. and Sylebra Capital, the people said.
Representatives for RMG II, ReNew and BlackRock declined to comment. Other investors in the PIPE didn’t immediately respond to requests for comment.
ReNew’s plan to go public through a deal with RMG was reported earlier by the Indian newspaper Mint.
RMG, sponsored by Riverside Management Group, raised $345 million in its initial public offering including so-called greenshoe shares in December. It’s part of an unprecedented surge in listings by special purpose acquisition companies, or SPACs, that has continued this year.
ReNew would receive about $610 million in net proceeds after using some of the money to pay down debt and repay existing investors who are selling portions of their stakes, according to the people. Other investors in the company include the Canada Pension Plan Investment Board and Abu Dhabi Investment Authority.
The prospective merger would extend a wave of clean-tech SPAC deals in the U.S. and expand it to include India’s growing renewables market. ReNew is positioned to benefit from India’s surging electricity demand as the country pushes to slash emissions and improve air quality.
India is aiming to use green sources for 40% of its energy needs by 2030, Prime Minister Narendra Modi said last week. ReNew now has more than five gigawatts of operational clean-power capacity
Read More: Modi Says India to Boost Green Energy Sources, Cut Imports
A huge build-out of renewables as the nation targets 450 gigawatts of capacity over the next decade — up from about 91 gigawatts now — is a $20 billion a year investment opportunity, Modi said last year. By 2040, solar generation is expected to account for about the same share of India’s energy mix as coal, currently the nation’s dominant power source, according to the International Energy Agency