Goldman’s ReNew Seeks $300 Million for Green Energy

  • ReNew Power seeks to raise $100-$150 million by fiscal end
  • Company to raise remaining balance of funds through an IPO

ReNew Power Ventures Pvt. wants to raise a part of the $300 million required for expansion of its green-energy projects before top shareholder, Goldman Sachs Group Inc., helps bring the company public next financial year.

ReNew Power will try to raise $100 to $150 million by March, Chairman Sumant Sinha said in an interview, adding that the balance would be raised through an initial public offering. The company, with almost 1 gigawatt of solar and wind power in operation, wants to double capacity by the end of the financial year in March and has another gigawatt under construction.

Sumant Sinha

Photographer: Mike Lawn/Bloomberg

“Now is the right time to start the process, and in the next three to six months we should be able to raise funds," Sinha told Bloomberg News in New Delhi. The money will go toward the “pipeline of 3 gigawatts.”

Indian companies are working to meet Prime Minister Narendra Modi’s ambitious renewable energy goals. He wants to install 100 gigawatts of solar, 60 gigawatts of wind and 15 gigawatts of other types of clean energy by 2022 at an estimated cost of $200 billion. The country currently has about 35 gigawatts of installed solar and wind capacity.

Gigawatt a Year

ReNew Power has raised total equity of $655 million since its inception in 2011. Included are four rounds from Goldman Sachs totaling $370 million. The company’s other investors include Abu Dhabi Investment Authority and the Global Environment Fund.

The company has enough existing equity to develop 2.5 gigawatts and generated cash-flow could be used to reach the 3-gigawatt mark, according to Sinha.

“We want to add a gigawatt every year to maintain our market share of 10 percent and for that we need to raise money now so that we can self-fund capacity in future," he said.

Sinha said he only wants to begin ReNew Power’s initial public offering after it has operational assets of 2 gigawatts and can give investors a clear pathway to 3.5 gigawatts of capacity.

IPO Timing

“The IPO can potentially happen in the next financial year,” Sinha added.

ReNew Power began as a wind-energy developer before deciding in 2013 to diversify into solar, which now forms the majority of its projects. The company has 1.2 gigawatts of wind and 1.8 gigawatts of solar.

Sinha doesn’t have any wind-energy projects in the pipeline for next year. The company is managing payment defaults at various projects from state energy retailers, some of which haven’t paid developers since July.

“We have the financial wherewithal to keep debt servicing current,” Sinha said, adding that 35 percent of the company’s revenues have been affected by payment defaults.

Sinha will focus on expanding the solar pipeline, as India could potentially tender 90 gigawatts of projects over the next six years to reach Modi’s targets. The focus on solar will also mean doubling the year-on-year head count to 700 by the end of March.

“We’re hiring more to build our own solar engineering-procurement-construction, or EPC, organization as we look to double capacity by fiscal end," he said.

(Company corrects timing and scale of fundraising effort starting in headline.)
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