Greenko Eyes $700 Mn From GIC, ADIA, Orix, Founders

Besides Singapore’s GIC Holdings Pte Ltd, Abu Dhabi Investment Authority, and Japan’s ORIX Corp., Greenko founders Mahesh Kolli and Anil Kumar Chalamalasetty are also participating in the round.

The definitive agreements for the primary equity round have been inked, and the funding will be used for capital expenditure on pumped storage projects, totalling 25 gigawatt-hour (GWh). The shareholding structure will be the same even after the transaction is completed. While GIC Holdings Pte. Ltd and Abu Dhabi Investment Authority currently hold 52% and 14%, respectively, in Hyderabad-based Greenko, ORIX Corp. has a 22% stake. Kolli and Chalamalasetty own the remaining 12% stake.

The equity fundraising comes after Greenko Energy prepaid $500 million of its dollar bonds due for repayment in August 2023 using its cash flow, taking the total repayment of its global bonds to $935 million. Greenko also repaid $435 million of corporate bonds issued by its subsidiary Greenko Mauritius by taking a fresh loan of $425 million. Of the $7.5 billion invested by Greenko, equity accounts for $2.5 billion. The firm has raised $5 billion from global green bonds.

Spokespersons for GIC, ADIA and ORIX Corp. declined comment. Queries emailed to a Greenko spokesperson on Thursday evening remained unanswered till press time.

“This primary equity raising will be from the affiliates of GIC, ADIA’s subsidiary, and ORIX," said the person seeking anonymity. Greenko owns India’s largest operational clean energy portfolio of 7.3 gigawatts (GW) and has so far invested $7.5 billion. It is building 50 gigawatt-hour (GWh) of storage capacity on pumped storage technology as part of its plan to set up an energy storage cloud platform of 100 GWh.

India’s power storage space is expected to be a vital part of its energy transition goals, the largest worldwide. The idea is to store cheap green power during off-peak hours in pump storage projects and release it for consumption when demand increases.

In the budget speech for FY24, finance minister Nirmala Sitharaman said the government is working on a detailed framework for pumped storage projects. Around 96 GW has been identified as a potential capacity for hydro pump storage schemes.

The government is also working on this policy for large-scale integration of renewable energy in the country’s power system, as large storages can help keep India’s power grids stable, considering that electricity is produced intermittently from clean energy sources such as solar and wind.

Global investors are queuing up to back India’s clean energy drive backed by the government’s intent and policy initiatives and have so far pumped in $78.1 billion between 2014 till 2022. According to Central Electricity Authority (CEA), the apex power sector planning body, India needs 27GW of battery storage by 2030, with four hours of storage and 10GW of hydro-pumped storage plants. According to CEA, the share of non-fossil fuel generation will grow from 42% of installed capacity in October 2022 to 64% by 2029-30. India has an installed renewable energy capacity of 167 GW.

Greenko is also active in the green hydrogen space and plans to supply the emission-free fuel to Germany’s gas trader Uniper. It has placed the lowest bid of ₹5 per kWh on a single cycle per day basis, with effective storage charges to be far lower than ₹2.5 per kWh, for the world’s first and largest technology agnostic energy storage tender floated by India’s largest power producer NTPC Ltd. Greenko was the lowest bidder for 3000 Mega Watt Hours (MWh) tender called by state-run firm’s unit NTPC Renewable Energy Ltd, with Italy’s Enel Group Indian arm Enel Green Power (EGP), JSW Neo Energy Ltd, Hinduja Renewables Energy Private Ltd, HES Infra Pvt Ltd, and India Grid Trust (IndiGrid) were also in the fray. The tender was for the supply of 500 megawatts for six hours for a 25-year period wherein various storage technologies such as PSP, lithium-ion battery, Sodium Sulfur (NaS) battery and compressed air storage competed.