Investment trio backs Indian renewables firm

ReNew Power Ventures Pvt Ltd has raised $140m from Goldman Sachs’ private equity fund and two other investors.

Goldman Sachs (GS) has reaffirmed its support for ReNew Power, the 460-megawatt (MW) renewable energy start-up launched in September 2011. This time, it is accompanied by two new sizable investors, the Asian Development Bank (ADB) and the Global Environment Fund (GEF).

With a $70 million injection, GS is providing 50 percent of the expansion capital, while ADB and GEF have committed $50 million and $20 million, i.e. 36 percent and 14 percent of the total, respectively.

The latest infusion of funds will enable ReNew Power to pursue its original target of 1,000MW of clean energy output by 2015.

ADB executive Ichiro Aoki says the growing pipeline of “quality wind power projects at various stages of development” coupled with [management’]s “proven track record of project development [and] sufficient access to debt capital” will allow the company to “achieve the target in the next couple of years.”

ReNew Power owns and operates 460MW of renewable energy assets in five states across India, which it has developed in nearly three years.

Prior to setting up ReNew Power, the firm’s founder, chairman and chief executive officer, Sumant Sinha, was chief operating officer of Suzlon Energy, the third-largest renewable energy company in India (with FY10 sales of $5.0 billion).

Under Sinha’s stewardship, Suzlon refinanced $3 billion worth of outstanding debt, raised additional funds of approximately $800 million, restructured $500 million of convertible bonds, and generated an order book in excess of $2 billion.

Sinha is also the name behind retail giant More, the retail branch of Aditya Birla Group, which became under his two-year tenure, India's largest food retailer.

ReNew is understood to have 500MW of projects in the pipeline, including a 50MW solar project in Madhya Pradesh, a state in central India.

While many investors have shown interest in the company in the last year, ADB, which is mandated to support clean energy development in its member countries, and GE, an alternative asset investment firm focused on energy, environment and natural resources, were both natural fits for the entrepreneur, according to a source.  

Goldman Sachs invested $250 million in the company in 2011, which was at the time the single largest investment in India’s renewable energy sector. According to Christopher Jung, a spokesperson at Goldman Sachs, the bank has invested $1.5 billion in clean alternative energy worldwide, in companies such as Horizon Wind Inc. and Nordex AG.