Actis to exit $1.5bn Indian renewables platform

The emerging markets-focused fund manager is selling Ostro Energy to CPPIB-backed ReNew Power for $1.5bn.

After investing $280 million less than four years ago to establish Ostro Energy, a renewables energy platform in India, London-based Actis is now selling the company in what is one of the biggest renewables transactions in the country.

While financial details were not disclosed, a source familiar with the transaction told Infrastructure Investor that the deal values Ostro at close to 100 billion rupees ($1.54 billion; €1.25 billion), including debt and equity.

Actis declined to comment on returns, other than to say, through a spokesman, that Ostro “is a successful investment”.

The firm funded the launch of Ostro though its third energy fund in August 2014, with a target to develop a 1GW portfolio of renewable energy capacity in India by 2019. Ostro’s total capacity now exceeds 1.1GW, 850MW of which is already commissioned.

ReNew Power is partially funding the acquisition with a capital injection of $247 million from the Canada Pension Plan Investment Board, one of its institutional backers. “As a result, the CPPIB’s combined investment in ReNew Power now stands at $391 million, following an earlier investment of $144 million in January 2018,” the Indian renewables company said in a statement.

Once the transaction is complete, ReNew’s capacity will exceed 5.6GW, including a portfolio of green energy assets it already owns with more than 4.5GW of capacity. More than 65 percent of the combined portfolio capacity is operational, the company said.

ReNew Power has attracted capital from several international strategic and institutional investors in the past few years. JERA, a joint venture between two Japanese power utilities – Tokyo Electric Power and Chubu Electric Power – invested $200 million for a 10 percent equity stake in ReNew Power in February 2017, following previous fundraising from the Abu Dhabi Investment Authority, the Global Environmental Fund and the Asian Development Bank.