Hyderabad/New Delhi: Sovereign wealth funds GIC Holdings Pte Ltd and Abu Dhabi Investment Authority (ADIA) will invest a combined $450 million (around Rs3,000 crore) in Greenko Energy Holdings in one of the largest funding rounds by an Indian clean energy producer.
“The money is being put in by GIC and ADIA and obviously we will also contribute our portion. Right now, $450 million is coming from these two institutions. We will maintain the shareholding at the same levels," Greenko Group president and joint managing director Mahesh Kolli said in an interview.
While GIC and ADIA hold 60% and 14%, respectively, in Greenko, founders Kolli and Anil Kumar Chalamalasetty, chief executive and managing director, together hold 26% in the company.
The proceeds of the investments will help fund Greenko’s plan to set up India’s first large integrated clean energy storage project along with generation projects totalling 10 gigawatt (GW) at an estimated investment of around Rs50,000 crore.
The news of the investment comes soon after Greenko agreed to buy Orange Renewable from Singapore’s AT Capital Group at an enterprise value of $1 billion. The equity value of the transaction is about $300 million, Mint reported on 4 June.
“It (the new funding) is to keep the balance sheet strong for further mergers and acquisitions and primarily support our strategy of supporting round-the-clock renewable energy," added Kolli.
While an ADIA spokesperson declined to comment, queries emailed to GIC on 25 April remained unanswered. GIC and ADIA have invested $1.5 billion till date in Greenko Group.
Greenko plans to make solar and wind power available round the clock by creating two large water pump storage projects. Greenko will leverage its hydro capacities to set up closed loop water storages, raising water to different heights and then releasing it into lower reservoirs to generate electricity on demand.
“Today the challenge that renewable faces is you can’t store it," said Mahesh.
According to Greenko, the equity component will be around Rs10,000 crore for the Rs50,000 crore investment. The company expects to have an Ebitda (earnings before interest, taxes, depreciation and amortization) of $725 million by March 2019.
“We will not only give round-the-clock renewable capability, we will give the discoms (power distribution companies) the ability to support them at the peak time as well. We will be the first guys to do this globally," added Chalamalasetty.
These projects, totalling 10GW of renewable energy, will translate into 2GW of round-the-clock power.