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SunEdison strikes a $270 million deal with Greenko for its India portfolio

SunEdison strikes a $270 million deal with Greenko for its India portfolio


part from $100 million in cash to be paid to SunEdison Inc. for its entire India portfolio, Greenko Energy Holdings will also take over the $170 million in liabilities for the eight projects of the US-based renewable energy firm, which has filed for bankruptcy protection.“Greenko will also put in the construction equity for the projects being set up,” said a person aware of the development requesting anonymity.The equity requirement for these eight projects is around Rs.2,010.2 crore, of which Rs.108.2 crore has already been infused by SunEdison. There is an immediate requirement for Rs.553 crore of equity infusion in these projects located in states such as Telangana, Andhra Pradesh, Karnataka and Jharkhand.

It currently costs Rs.4-5 crore per megawatt (MW) to set up a solar power project. According to the government, around Rs.71,201 crore has already been sanctioned to finance green projects.InfraCircle reported on 17 June about SunEdison Inc. portfolio sale with Rothschild (India), a financial advisory group, running the sales process termed Project Joule.While a SunEdison spokesperson declined to comment, queries emailed to Greenko Energy Holdings, followed by phone call and text message to the spokesperson, on 10 August remained unanswered.This comes in the backdrop of a consolidation in the renewable energy sector. In the largest deal in the country so far, Tata Power Co. Ltd signed an agreement to buy the renewable energy business of Welspun Group for Rs.9,249 crore, including debt, in June. Also, overseas investors, including Japan’s Sumitomo Corp., are looking to invest in the Indian clean energy sector and have been scouting for opportunities.

Experts believe that renewables have a good future in India.
“The renewable energy sector does not have regulatory problems unlike the thermal sector. Moreover, completely opposite to the conventional energy sector, renewables have greater number of buyers and comparatively fewer sellers,” said Kuljit Singh, partner and industry leader, infrastructure, at consultancy firm EY.SunEdison became India’s forerunner in the solar power sector by quoting a tariff of Rs.4.63 kilowatt per hour (kWh) in November 2015 for a National Solar Mission tender for 500MW in Andhra Pradesh.

Singapore’s sovereign wealth fund GIC and Abu Dhabi Investment Authority are stakeholders in Greenko. According to information available on Greenko Group’s website, “Greenko currently has 1 gigawatt (GW) operating capacity and is aggressively working towards reaching the capacity of 3GW by 2018”.India has attracted considerable amount of investor interest from within the country and abroad. Clean energy is at the forefront of the government’s initiatives to cut down its emission by 2030 in order to abide by its commitments at the Paris Climate Change Conference.The National Democratic Alliance government has set a target of adding 175GW of renewable energy projects across the country by 2022. Of this, 100GW is expected to be from the solar power circuit and 60GW from the wind power domain. India has an installed capacity of 26.8GW of wind and 7.6GW of solar power.

Anand Gupta Editor - EQ Int'l Media Network


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