Canada#39;s CPPIB, Brookfield eyeing more than $1 bn investment in ReNew Power

November 14
22:56 2019

India’s largest green energy company ReNew Power is gearing up for a major internal rejig involving its top global investors which could see Canada’s CPPIB (Canada Pension Plan Investment Board) and Brookfield in the driver’s seat if deal talks fructify, sources with knowledge of the matter told Moneycontrol.

ReNew Power was founded in 2011 by Sumant Sinha, son of Former Finance Minister Yashwant Sinha and the firm is the largest renewable energy IPP (Independent Power Producer) in terms of total energy generation capacity.

“ CPPIB, an existing investor, and Brookfield, the newcomer, are looking at making a combined investment of more than a billion dollars in ReNew Power and buy out stakes of other global investors. The discussions are at a preliminary stage and may or may not necessarily result in a transaction,” a source told Moneycontrol.

“CPPIB is in talks to buy out the entire stake held by ReNew Power’s oldest investor Goldman Sachs and provide it with an exit. Brookfield, on the other hand, is eyeing the stake held by another existing investor ADIA (Abu Dhabi Investment Authority),” added another source.

Goldman Sachs has invested around $ 370 mn in ReNew Power in a phased manner between 2011 and 2015. It failed to get an exit earlier as the company’s IPO plans were shelved. It holds a 48.6 percent stake, as per the draft IPO prospectus filed by the company in May 2018.

Including the initial $ 144 million investment in January 2018, CPPIB’s total investment in ReNew Power stands at $ 391 million after its $ 247 mn investment in April 2018. CPPIB held a 16.2 percent stake, according to the draft IPO prospectus.

ADIA, on the other hand, had invested $ 200 mn in ReNew Power in 2015. In July 2019, ReNew Power announced that it had raised $ 300 mn via a rights issue, with Goldman Sachs, ADIA and CPPIB infusing $ 100 mn each.

At December 31, 2017, CPPIB’s investments in India totalled C$ 6.4 billion. In order to build a diversified portfolio of CPP assets, CPPIB invests in public equities, private equities, real estate, infrastructure and fixed income instruments. In the domestic renewable energy space, Brookfield has earlier acquired two wind farms from Axis Energy Ventures for nearly Rs 500 crore ($ 72 million).

ReNew Power’s other key existing investors include Japan’s JERA and GE SACEF India managed by the Global Environment Fund. As of June 2019, the company had a total capacity of over 8 GW of wind and solar power assets across the country, including commissioned and under development projects. It develops, builds, owns and operates utility-scale wind and solar energy projects as well as distributed solar energy projects that generate energy for commercial and industrial customers.

The government has set a target of having 175 GW of installed clean energy capacity by March 2022. Of that, 100 GW is to be in solar energy, 60 GW in wind projects and the rest in small hydel (up to 25 MW) and biomass plants.

In response to queries from Moneycontrol, CPPIB, ADIA, Goldman Sachs, Brookfield & ReNew Power declined to comment.Get access to India’s fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code “GETPRO”. Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.

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