Japanese financial service group ORIX has reached a framework agreement with an Greenko Energy to acquire 20% stake in the Indian renewable energy company for about $980m.
Greenko currently has about 4.4GW operating renewable energy capacity in India including solar, wind, and hydro power projects. In addition, it has more than 8GW of projects under construction or development.
In exchange for Greenko’s new shares, Orix will also integrate its complete wind power generation business in India into Greenko Energy.
As part of the deal, the company will add its entire shareholding in seven special purpose vehicles (SPVs) holding 873MW of wind power projects in seven Indian states along with an asset management firm into Greenko’s portfolio.
Greenko managing director and chief executive officer Anil Chalamalasetty said: “We welcome ORIX as a long-term partner.
“The transaction will further drive capacity, revenue, EBITDA and overall earnings growth for Greenko and our stakeholders.
“Indian energy markets are transitioning from deficit markets to demand-driven contracts requiring reliable, flexible and costcompetitive energy. Greenko is focused on building IREP with storage, which can compete with conventional energy assets like thermal in quality, quantity and cost.”
ORIX expects the transaction to be concluded by the end of the year
Subject to pending investment committee approval upon completing due diligence and other legal procedures, the deal is expected to be concluded by the end of the year.
Greenko’s current shareholders are Singapore’s Government Investment Company (GIC) which owns 65.8% stake and the Abu Dhabi Investment Authority (ADIA) holds 16.5% interest.
The acquisition will increase the company’s overall operational capacity to approximately 6.5GW.
It also has long-term power purchase agreements (PPA) for more than 20 years with state-run agencies and state-owned power companies and with other entities.
