Macquarie, JSW Group, Actis line up to buy O2 Power in $1-billion deal
Summary
- O2, a renewable energy platform, is currently owned by European alternative asset manager EQT and Singapore’s state-owned fund v.
- EQT and Temasek have invested $500 million in O2 Power and hold 51% and 49% of the company, respectively.
NEW DELHI : Macquarie Group, one of the largest foreign infrastructure investors in India, JSW Group’s JSW Neo Energy, and Actis Llp have signed non-disclosure agreements (NDA) to buy renewable energy platform O2 Power in a deal with an equity value of around $1 billion, said two people aware of the development.
Barclays is running the sale process for the deal, which has an enterprise value of around $1.5 billion. More NDAs are expected to be signed before interested investors submit non-binding offers (NBO). Shortlisted bidders will make binding offers.
European alternative asset manager EQT and Singapore’s state-owned fund Temasek have invested $500 million in O2 Power and hold 51% and 49% of the company, respectively.
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O2 Power, founded by former ReNew Power executives Parag Sharma, Peeyush Mohit and Rakesh Garg, is targeting a portfolio of around 5 gigawatts (GW) and has already created a 4GW capacity.
Largest deal
“O2 Power sale will be one of the largest deals in the space. Macquarie Group, JSW Group and Actis have signed NDAs to buy O2 Power. The sale process was formally launched this month," said one of the two people on the condition of anonymity.
Macquarie Group has been investing in India’s infrastructure space since 2008 and is focussed on energy transition, infrastructure and digital communications.
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Actis’ green energy platform, Blupine Energy Pvt. Ltd, is developing grid-connected solar and wind power parks, besides commercial and industrial (C&I) projects.
Blupine Energy is Actis' third clean energy firm in India. It sold Ostro Energy to ReNew Power Ventures at an enterprise value of $1.5 billion in 2018 and Sprng Energy to energy giant Shell Plc at an enterprise value of $1.55 billion in 2022.
JSW Neo Energy has a 13.6GW generation portfolio, of which 2.6GW is in the construction stage. It bought 1.75GW of renewable energy projects from Mytrah Energy at an enterprise value of ₹10,530 crore in 2023.
“As a matter of policy, we do not comment on behalf of our portfolio companies or subsidiaries as we do not manage their daily operations," said a Temasek spokesperson in an email, adding: “You may reach out to O2 Power directly."
Queries emailed to the spokespersons of O2 Power, Barclays and JSW Group on 11 July remained unanswered till press time.
Spokespersons for EQT, Macquarie Group and Actis declined to comment.
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O2 Power is also selling solar projects totalling 350 megawatts (MW). Mint reported in March that Edelweiss Infrastructure Yield Plus Fund’s Sekura Energy Ltd was the front-runner in the deal having an equity and enterprise value of $50 million and $200 million, respectively.
Other deals
The other big deal in the renewable energy space currently in play is a significant majority stake sale in National Investment and Infrastructure Fund (NIIF)-backed Ayana Renewable Power Pvt. Ltd, which may translate into up to 100% stake sale at an equity valuation of around $800 million.
Macquarie Group and JSW Neo Energy have also submitted NBOs for Ayana. Macquarie Group is also among firms eyeing Hygenco Green Energies Pvt. Ltd to acquire a 49% stake in the Gurugram-based firm for an estimated equity value of around $400 million.
India has an installed renewable energy capacity of 180.79GW, including 73.31GW of solar and 44.73GW of wind power capacity, out of a total power capacity of 444.75 GW. The government aims to add 50GW of green energy capacity annually to reach 500GW of renewable capacity by 2030.
