General Insurance Corporation (GIC) and Abu Dhabi Investment Authority (ADIA) have signed an agreement to invest $495 million as primary equity in Greenko Energy Holdings (Greenko), a renewable energy project developer.

The investment will fund Greenko’s objective to provide round-the-clock renewable power by installing two 1.2 GW storage projects in Pinnarpuram and Saundatti, located in the states of Andhra Pradesh and Karnataka, respectively.

The date of conclusion for the projects is estimated to be 2022, with a capital outlay of $2 billion.

Greenko’s focus on establishing an efficient energy platform to generate round-the-clock (RTC) power is an attempt to create a reliable and schedulable power generation and eventually replace fossil fuels. The two new storage projects are a crucial move in this direction.

“Indian Energy Markets are transitioning from deficit markets to demand-driven contracts, requiring reliable, flexible, and cost competitive energy. Greenko is focusing in building integrated renewable energy assets with storage to address these markets by competing with conventional energy assets like thermal in quality, quantity, and cost,” said Anil Chalamalasetty, the CEO of Greenko.

“Greenko, as a leader in the Indian renewable energy sector, is well-positioned to execute the integrated renewable energy projects,” said Mr. Ang Eng Seng, Chief Investment Officer (CIO) of Infrastructure at GIC. Its innovative use of hydro storage and renewable power will enable utilities to mitigate the intermittency issues of renewable power, facilitate the increased penetration of renewable power and reduce the country’s reliance on conventional thermal power over time. As a long-term investor, we are very pleased to be supporting Greenko’s next phase of growth, which will enhance clean energy offerings and benefit communities in India in the long run,” he stated.

GIC will retain its position as the main shareholder in Greenko. Greenko’s primary installations are in the wind, solar and hydro with a combined capacity of 4.2 GW. This combined with the new storage projects and a 24/7 renewable power strategy is propelling their vision to completely steer away from fossil fuels.

A year ago, Greenko raised primary equity of $447 million from an affiliate of GIC and the ADIA.

Greenko Group forged a definitive purchase agreement last year for the acquisition of Skeiron Green Renewables. This was preceded by the deal where Greenko acquired around 907 MW of operational solar and wind projects from Orange Renewables.

India has minimal energy storage projects in its renewable mix. To fill this gap and catch up with market changes, India is working on a National Energy Storage Mission (NESM) which will boost the energy infrastructure of the country.

Of late, the government seems to have acknowledged this dearth of storage manufacturing units in the country. Just a few days ago, the Ministry of New and Renewable Energy (MNRE) issued invitations requesting proposals to develop gravity storage projects and also to utilize solar to produce hydrogen from seawater. The ministry believes that with the increasing share of renewables in the country, there will soon be a requirement for energy storage to absorb fluctuations and for grid balancing.