Tata Power Confirms $1.45 Billion Deal For India’s Largest Renewable Energy Buyout

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Corporate filings made by Tata Power earlier this month have confirmed media reports that the company will undertake India’s largest ever renewable energy buyout.

Tata Power, part of the Tata industrial conglomerate, has announced that it entered an agreement to acquire renewable energy assets of Welspun Renewables Energy, part of the Welspun Group. As per the agreement, Tata Power will acquire 1,152 MW of wind and solar power capacity. This includes 685 MW of operational solar and wind energy capacity, 200 MW of capacity set to be commissioned by June’s end, and another 257 MW in capacity likely to come online by Q4 2016.

The operational capacity also includes one of the largest solar power projects in India, a 151 MW solar PV plant in Madhya Pradesh. GE Energy Financial Services holds a stake in the project.

The total size of the transaction is expected to be around $1.45 billion, including debt, making it the largest such deal in India’s renewable energy market.

Welspun Renewables is part of the Welspun Group, which primarily operates in the fabric manufacturing sector in India. The group diversified into the renewable energy sector while the sector itself was very young in India and feed-in tariffs were very high.

Last year, Tata Power announced the launch of Tata Power Renewable Energy Limited as a separate company that will own and operate all the renewable energy assets of the parent company.

Tata Power will transfer control of renewable energy assets to Tata Power Renewable Energy Limited. Upon the completion of the transfer, Tata Power Renewable Energy Limited will control the operational capacity of 720 MW and the under-construction capacity of 250 MW. Assets acquired from Welspun Renewables Energy are also expected to be shifted to Tata Power Renewable Energy.

In April, Tata Power announced plans to increase its share of renewable energy output from 20% to 35-40% by 2025. The company currently has an installed capacity of 9,156 MW, including 593 MW from wind energy and 60 MW from solar power projects.

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An avid follower of latest developments in the Indian renewable energy sector.

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