ReNew helps ramp up India's renewable energy, attract investment in fast-rising market

26, Jul. 2021

ReNew Power 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 across India. (Photo: ReNew Power)
ReNew Power 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 across India. (Photo: ReNew Power)

By Celine Chen

INDIA, NNA - ReNew Power, a leading renewable energy producer in India, has won a 200 megawatt solar generation project in an auction by the largest electricity distribution utility in India while it is poised to garner more growth capital via an initial public offering in the U.S.

The Indian startup-turned-unicorn will sign a 25-year power purchase agreement with Maharashtra State Electricity Distribution Co. (MSEDCL) by the third fiscal quarter of 2022 to supply clean energy to the western state of Maharashtra in India, said ReNew in a press release on July 20.

To be constructed in Gujarat or Rajasthan, the plant is expected to be completed by the first fiscal quarter of 2024. ReNew plans to deploy high-efficiency Mono Perc solar panels along with domestically produced modules from its own manufacturing facility.

Sumant Sinha, ReNew's founder, chairman and CEO, said, "Our win of the 200 MW MSEDCL project at an expected return comfortably above our threshold in an oversubscribed auction is a testament to ReNew's competitive advantage. This project also marks a significant step forward for ReNew Power as it will be the first project where we will deploy modules from our manufacturing facility in Gujarat."

ReNew, which develops, builds, owns and operates utility-scale wind and solar energy projects, is India's leading renewable energy independent power producer (IPP) by capacity. A solar titan in the country, it is the 10th largest global renewable IPP by operational capacity.

Sinha founded the company in January 2011, with a vision to transform the way energy is produced and consumed in the sixth-largest economy in the world.

ReNew has since grown exponentially and is today one of India’s premier renewable energy companies with an aggregate portfolio of approximately 9.86 GW (gigawatt) distributed over more than 100 locations.

ReNew has been funded by marquee investors such as Goldman Sachs; CPPIB, the largest Canadian pension fund; sovereign wealth fund Abu Dhabi Investment Authority; and JERA, the largest power generation company in Japan.

It has raised more than $6 billion of capital, both equity and debt.

Over the last five years, ReNew has emerged as one of the leading asset creators in India. It now generates 1 percent of the country's total electricity yearly, helping to mitigate 0.5 percent of India’s carbon emissions in a year, said the company.

Earlier this year, ReNew Energy Global Plc (ReNew Global) entered into an agreement to merge with RMG Acquisition Corporation II, a special purpose acquisition company (SPAC) publicly traded on the Nasdaq exchange in New York, that would result in ReNew becoming a publicly listed company.

The $8 billion transaction is expected to be completed soon within the current quarter.

ReNew is expected to receive approximately $610 million in net proceeds, enabling the funding of its expansion plans through 2025.

After the merger is effected, existing ReNew shareholders will hold about 70 percent of the combined company.

The transaction includes a fully committed, upsized $855 million PIPE (Private Investment in Public Equity) from investors that include BlackRock; BNP Paribas Energy Transition Fund; Mr. Chamath Palihapitiya; Sylebra Capital; TT International Asset Management Ltd; TT Environmental Solutions Fund and Zimmer Partners.

The transaction also includes $345 million of gross cash held in trust by RMG.

In June, ReNew Global announced its proposed board of directors who collectively boast decades of experience in business, government, and international institutions.

The six independent directors are Sir Sumantra Chakrabarti, a former president of The European Bank for Reconstruction and Development; Manoj Singh, a former chief operating officer at Deloitte Touche Tohmatsu Ltd; Michelle Robyn Grew, group chief operations officer of Man Group; Ram Charan, a renowned management thinker and advisor to Bank of America and Toyota; Vanitha Narayanan, former chairman and MD of IBM India; and Robert S. Mancini, CEO of RMG II.

Sumant Sinha, who holds the same positions at ReNew Global, said, "The proposed Board is the right group to guide ReNew in its next phase of growth, and to serve as stewards for the new publicly listed company."

Last month (June), Sinha himself was recognized by the United Nations Global Compact as one of 10 SDG Pioneers of 2021, business leaders who have done exceptionally well in advancing the Sustainable Development Goals (SDG) with their implementation of principles on human rights, environment, labor, and anti-corruption. Global Compact is a UN-led initiative to promote corporate sustainability.

Sinha said, "A green recovery is of paramount importance in the post-pandemic planet, and we must ensure that this recovery is accelerated through partnerships."

The Indian government aims to achieve 227 GW of renewable energy capacity by 2022, surpassing the earlier target of 175 GW set in the Paris Agreement.

India's renewable energy sector was the fourth most attractive renewable energy market for investment in the world, according to a 2018 index by EY.

It was ranked fifth in wind power as well as solar power, and fourth in renewable power installed capacity in 2019, said India Brand Equity Foundation (IBEF), a trust established by the ministry of commerce and industry.

Installed renewable power generation capacity has gained speed over the past few years, achieving an impressive compound annual growth rate of 17.33 percent in FY2016-20.

As India looks to meet its energy demand on its own, which is expected to reach 15,820 TWh (kilowatt hour) by 2040, renewable energy is set to play a significant role.

The government plans to establish a renewable energy capacity of 523 GW, including 73 GW from hydro power by 2030.

The ministry of new and renewable energy reported that the country installed 643.66 MW of renewable energy capacity in May, taking the total installed renewable capacity to 95.66 GW.

India is targeting about 450 GW of installed renewable energy capacity by 2030, with over 60 percent expected from solar.

While northern India is being promoted as the hub for renewable energy in the country, the government wants to develop a ‘green city’ in every state of the country, powered by renewables.