GIC, ADIA back Indian renewable developer’s $1bn acquisition

The two sovereign wealth funds are investing an additional $395.4m in Greenko as the Indian renewables developer acquires a smaller rival.

Greenko Energy, one of the largest renewable energy developers in India, has raised $447 million from its existing investors, including Singapore’s GIC and the Abu Dhabi Investment Authority, to support its acquisitive growth.

GIC, which remains Greenko’s majority shareholder since its initial investment in October 2015, is investing $316.1 million in this latest round of equity raising, while ADIA and the company’s promoter firm Greenko Ventures will invest $79.3 million and $52 million, respectively, according to a Greenko statement.

This is the fourth round of equity GIC is injecting in Greenko in the past three years, and ADIA’s third. In 2015, GIC invested £162.8 million (€185.9 million; $218.4 million) in the company to acquire a majority stake, followed by commitments of $150 million and $123.9 million in June 2016 and March 2017, respectively. ADIA also committed $80 million and $31.1 million in the 2016 and 2017 rounds of equity raising.

In addition to announcing the fresh round of equity raising, Greenko also said that it is acquiring Orange Renewables, a New Delhi-based developer backed by Singapore’s private investment firm AT Capital, for an enterprise value of $922 million.

The transaction will see Greenko boost its renewables portfolio to about 11GW, by integrating Orange’s 907MW of operating and near-completion solar and wind assets and a 500MW project pipeline. Greenko has an existing portfolio of more than 3GW of operating capacity and more than 7GW of solar, wind and hydro projects under construction and development.

Greenko had not responded to queries seeking comments at the time of publication. GIC and ADIA declined to disclose further investment details regarding Greenko.

It is understood that GIC owns a 60 percent stake in the company, while ADIA holds around 15 percent. The rest is held by founders Anil Kumar Chalamalasetty and Mahesh Kolli through Greenko Ventures.

A GIC spokeswoman told Infrastructure Investor that “as a long-term investor, we are confident of Greenko’s business model. We look forward to working closely with Greenko’s management to develop the company to be the leading owner and operator of clean energy projects in India.”

GIC has made direct investments in renewables energy assets globally. In addition to Greenko, the Singaporean sovereign fund invested in the Philippines’ Energy Development Corporation and Japan Renewable Energy Corporation in 2017.

ADIA, for its part, made its foray into India’s clean energy sector in October 2015, when it invested in developer ReNew Power, another major player in the market, with over 3.9GW of renewables capacity in operation and another 1.9GW under development. In April, it acquired Actis’ Indian renewables platform Ostro Energy. ReNew Power’s institutional backers include Canada Pension Plan Investment Board, Goldman Sachs, Global Environmental Fund, JERA and the Asian Development Bank.