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Goldman-Backed ReNew Power to Invest USD 9 Billion in India’s Green Push

ReNew Power Pvt., one of India’s biggest renewable power producers, plans to invest USD 9 billion in the wind and solar projects through 2025 amid a government-backed effort to reduce emissions.

April 7, 2021

Renewable Energy

ReNew Power, backed by investors such as Goldman Sachs Group Inc. and Canada Pension Plan Investment Board, aims to more than triple its renewable power capacity to 18.5 gigawatts by 2025, Chairman Sumant Sinha said in an interview. The Gurugram, India-based company will look at building its own projects as well as acquisitions for growth.

India, the world’s third-biggest emitter of greenhouse gases, aims to reduce its dependence on coal and expand renewable power capacity almost five-fold to 450 gigawatts by 2030, a $20 billion a year investment opportunity through the end of the decade, according to Prime Minister Narendra Modi. ReNew is positioning itself to play a central role in the nation’s massive green energy build-out.

New generation is also needed as millions of Indian households take advantage of rising incomes to purchase vehicles and electrical appliances, driving a 5% annual growth in power demand through 2040 in the country, according to the International Energy Agency.

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To attract investment in the sector, India has introduced renewable purchase obligations, which require electricity buyers to include clean power in their portfolio. The government has also waived transmission charges for hauling wind and solar power from one state to another.

ReNew has about 5.4 gigawatts of operational wind and solar plants, while 4.5 gigawatts of projects are under development. The company has agreed to merge with U.S.-based blank-check company RMG Acquisition Corp. II, a deal that will give it a U.S. listing and net cash proceeds of about $610 million.

The company is also looking at new ventures, including solar manufacturing. India’s decision to levy import taxes on cells and modules makes investment in domestic production a favorable proposition, Sinha said, adding the company’s main focus will be to secure supplies for its own projects.

Also Read: India’s Biggest Floating Solar Power Plant Coming Up in Telangana.

Power distribution, considered the weakest link in country’s electricity value chain, is another area ReNew is examining. Most distribution firms controlled by provincial governments lose money on sales due in part to theft or poor bill collection, which in turn delays payments to power generators and deprives consumers of reliable electricity.