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Tuesday, January 31, 2023

ReNew (NASDAQ: RNW) Acquire an Operating Wind and Solar Portfolio of 527.9 MW

ReNew Energy Global plc (NASDAQ: RNW) inked a definitive agreement to buy an operating wind and solar portfolio of 527.9 MW. The portfolio is comprised of 471.65 MW of wind and 56.25 MW of solar assets. A PPA for a 200-MW solar project has also been inked by the company with MSEDCL. The Company’s gross total portfolio will increase by over 25% to 12.8 GW from 10.2 GW at the start of 2022 as a result of both purchases.

Customers are even more eager to sign new power agreements to assure future supply in light of recent electricity shortages and blackouts. ReNew will be at the forefront of this clean energy boom, which will aid India’s critical fight against climate change. The agreements include 25 MW of PPAs with corporate customers in Gujarat, Maharashtra, Madhya Pradesh, Karnataka, Rajasthan, Telangana, Kerala, and Tamil Nadu, as well as PPAs with state distributors in Gujarat, Maharashtra, Madhya Pradesh, Karnataka, Rajasthan, Telangana, Kerala, and Tamil Nadu. The contracts have an average life span of 17 years.

ReNew will supply electricity at ₹2.43/kWh (~US 3.1 ¢/kWh) for 25 years for the MSEDCL PPA. The asset will be located in Rajasthan and would provide power to Maharashtra. The project is planned to be completed by the fourth quarter of FY24.

Furthermore, the 527.9 MW of operational wind and solar plants that were acquired are scattered across eight Indian states. These agreements have a total enterprise value of roughly 30 billion (US$ 388 million) and are expected to generate EBITDA of around 3.95-4.24 billion (US$ 51-55 million) for the full year FY23. The whole acquisition is projected to close in Q2 FY23, however, ReNew will receive all cash flows generated by the assets as of the lock box date, which is April 1, 2022.

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