SunEdison India assets to help double Greenko capacity

Greenko Energy Holdings, the green power developer backed by sovereign wealth funds, expects to double its capacity in India by 2019 with the help of assets acquired during the bankruptcy of SunEdison Inc.

Generation capacity should grow to about 5 gigawatts in the next two years as new projects come online and Greenko integrates 1.5 gigawatts of SunEdison assets into its portfolio, Mahesh Kolli, the founder of the company based in Hyderabad, India, said in a telephone interview.

“Obviously when SunEdison projects got added, everything got accelerated,” Kolli said. The company will achieve its earlier goal of three gigawatts by 2018 by the end of this year.

Greenko is among the companies benefiting from India’s ambition of increasing renewable energy capacity to 175 megawatts by 2022 from 50 gigawatts currently. In order to help finance a faster expansion, Greenko’s two main shareholders — Singaporean sovereign wealth fund GIC Pvt. and the Abu Dhabi Investment Authority — pumped $155 million in of fresh equity into Greenko, according to a separate statement on Monday. GIC is invested $123.9 million and ADIA will put in the remaining $31.1 million.

Rights Issue

“GIC has increased its stake from 61 percent to 63 percent, and it’s more like a rights issue because both the shareholders participated,” said Kolli, who holds a 21 percent stake along with co-founder and Greenko Chief Executive Officer Anil Kumar Chalamalasetty. ADIA owns 15 percent, he said.

“Cash equity invested in the business is more than $1 billion after this round of funding,” Kolli said. Greenko has about $2.5 billion debt on its $4 billion balance sheet.

Starting in September last year, Greenko acquired SunEdison’s portfolio of 1.5 gigawatts of clean energy capacity, of which 400 megawatts were operational. Of the 1,100-megawatts in SunEdison’s pipeline, 600 megawatts will be finished by the end of April, including the 500-megawatt Andhra Pradesh project in which the U.S. company drove tariffs to a record low.

The rest of SunEdison’s project pipeline will become operational by December, Kolli said.

Kolli pointed to his company’s project portfolio, built without ever participating in auctions, as reflecting in-house abilities on land management and analysis of data on wind strength. Greenko has about 1.3 gigawatts of wind projects, 400 megawatts of small hydro capacity and 800 megawatts of solar among a 2.5-gigawatt portfolio of assets nearing operation.

Own Assets

“We develop our own assets instead of getting third parties to build for us or buying from them, as is the dominant model in India,” Kolli said.

The company capacity isn’t constrained by auctions because it combines organic growth with mergers and being able to turn around distressed assets through acquisition at late stages, Kolli said.

India has had solar auctions since 2010 and last month conducted its first wind auction, which is expected to become the new standard going forward.

While Greenko has an organic wind project pipeline of 2 gigawatts, it is open to acquiring more projects if auctions do not look appealing.

“If everybody has to go through auctions, we’ll still be competitive, probably more competitive,” Kolli said, adding that if he doesn’t find auctions appealing enough, the company can do more acquisitions.

Greenko is close to acquiring another 100 megawatts of hydro assets in north India and will add 300 megawatts by next year through acquisition, he said. The developer’s portfolio will generate close to $500 million in earnings before interest, tax, depreciation and amortization next financial year beginning April.

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