Equinor ASA, a state backed energy company from Norway, is planning to invest in an Indian company ReNew Power Ltd. which works in renewable energy. The information was revealed by a person closely familiar with the deal. According to this source, ReNew’s earlier investors Canada Pension Plan Investment board and Goldman Sachs want to exit from the deal.
Equinor’s 67% stake is owned by Norwegian government. The company employs over 20,000 people and has presence in over thirty countries. The company is currently engaged in production, development and exploration of gas and oil and has also entered the renewables field with projects in solar power and wind.
The news comes in the wake of ReNew Power’s plan to make its latest public offering. The company filed the draft IPO proposal in May 2018 and received regulatory approval in July 2018. The new round of issue involved issuing fresh shares worth Rs 2600 crores with the cumulative sale of 94.37 million shares by the existing investors.
The company, led by Sumant Sinha acquired its competitor Ostro energy for Rs 10,000 Crore from private equity firm Actis. The acquisition deal was cited by some as the largest buyout deal in the green energy sector of India. The deal increased ReNew’s operational capacity form 4.5GW to 5.6GW.
The investment from a Norwegian company is the latest in series of investments by foreign players in India’s renewable energy industry. Several global players including pension funds like
Caisse de dépôt et placement du Québec (CDPQ) and CPPIB are also interested in the renewables sector, as reported by VCCircle.
The interest shown by investors worldwide is not unfounded, as India’s green energy sector has seen huge developments and heightened activity owing to India’s ambitious push to increase clean energy production to 175GW by 2020. The target includes a 60GW wind power and 100GW solar power target. To achieve these humongous goals, India would need $125 billion in investments which implies increasing expenditure on infrastructure development.
Nandini Roy Choudhury is a thought leader and subject matter expert on a range of industries, notably retail & consumer goods. Her analytical skills and lucid qualitative analysis have made her an authoritative figure on this domain.