ReNew Power Sells its Rooftop Solar Portfolio for ₹6.72 Billion

Indian renewable energy developer ReNew Power announced that it has sold its 117 MW of rooftop solar portfolio to distributed solar company Fourth Partner Energy for ₹6.72 billion (~$89.9 million).

The net proceeds from the sale are ₹5.35 billion (~$71.6 million) after accounting for an outstanding debt of ₹1.37 billion (~$18.3 million). The company expects to record a gain from the deal.

The company said it sold the distributed rooftop solar portfolio to relocate capital into higher-return opportunities and focus on large utility-scale projects.

With the sale, the run-rate-adjusted earnings before interest, taxes, depreciation, and amortizations (EBIDTA) will be reduced to ₹700 – ₹720 million (~$9.35 – $9.55 million).

Commenting on the sale, Sumant Sinha, chairman, and chief executive officer of ReNew Power, said, “Strong capital discipline is a core value for ReNew. This sale illustrates the value that can be released through the sale of assets and enhances our ability to capitalize on higher-return opportunities in the near term.”

ReNew Power had a total capacity of 10.3 GW of renewable energy projects across India, including commissioned and committed projects as of December 31, 2021.

In July 2021, Fourth Partner Energy announced that it had acquired distributed solar portfolio with a capacity of 8.9 MW (DC) from Statkraft India. Of this, 5 MW is an open access solar project, and the remaining is rooftop solar.

Mercom had earlier reported that Fourth Partner Energy raised $125 million in equity funding. Norwegian investment fund Norfund brought in $100 million while the existing shareholder, the Rise Fund, invested the remaining $25 million. The Rise Fund is a global impact investment fund managed by TGP.

Earlier this month, ReNew Power announced that its wholly-owned subsidiary, India Clean Energy Holdings, raised $400 million at 4.5% by issuing senior secured dollar notes. The company was listed on the Nasdaq after completing a business combination with RMG Acquisition Corporation II, a special purpose acquisition company (SPAC).

According to Mercom’s 2021 Solar Funding and M&A Report, there were a record 126 merger and acquisition (M&A) deals in 2021. Most of the transactions involved solar downstream companies.