The Government of Singapore Investment Corporation (GIC), a $100 billion sovereign wealth fund, has invested £100 million (€117 million; $151 million) in Indian renewable developer Greenko, the latter announced last Friday.
The deal will see GIC buy shares of Greenko subsidiary Greenko Mauritius. The acquired shares will be able to be converted into ordinary Greenko shares at a price of 260 pence per share “subject to a final adjustment between July 1, 2015 and June 30, 2017,” Greenko said in a statement.
A source familiar with the deal explained the investment is being done through a structured instrument with the conversion price to be determined later based on a minimum return.
GIC’s £100 million investment buys it a minimum of 19.5 percent in Greenko on a fully diluted basis and not more than 29.99 percent of the renewable firm at any time. Greenko’s shareholders will have to approve a capital increase for GIC’s investment to take place at a meeting on April 4.
Greenko said it will use the money to boost its portfolio and take it past its original target of 1,000 megawatts (MW) by 2015, establishing “the foundations for the next stage of Greenko’s growth strategy to approximately 2,000MW in 2018,” the firm said. It added it will focus on utility scale wind farms and Himalayan run-of-river hydropower projects, of which it currently has 202MW and 180MW respectively under construction.
The Indian developer was bullish on the Indian power market, highlighting that its portfolio is now able to “sell power in most states at or below the price of conventional generation”. In addition to wind and hydropower, Greenko’s portfolio comprises natural gas and biomass assets.
Private equity firms Aloe Private Equity – the Indian company’s founding investor – and TPG also hold stakes in Greenko. The latter was advised on the GIC deal by Arden Partners and Macquarie Capital.