Tata Power signed agreement to acquire Welspun Renewables

Tata Power Co. Ltd on 12 June 2016 agreed to acquire renewable energy company Welspun Renewables Energy Pvt. Ltd.
Tata Power, one of the largest integrated power companies in India, is targeting doubling its total generation capacity across thermal, renewable and hydropower to 18 GW or 18,000 MW by 2022 from 9 GW now. India has a target of installing 100GW of solar power capacity and 60GW of wind power capacity by 2022. Last year in December, US-based SunEdison Inc. terminated a deal to acquire Singapore-based Continuum Wind Energy Ltd, which has assets in India and is controlled by Morgan Stanley Infrastructure (MSI). This deal was earlier anticipated to be one of the largest in India’s clean energy sector.
WREPL has one of the largest operating solar energy portfolios in India, across 10 states. Welspun Energy is privately owned by the Welspun Group with public listed Welspun Enterprises Ltd holding around 15.5% stake.
It had got institutional funding from across the globe for some key projects. General Electric made its first Indian solar energy investment in the company, funding $24 million at a Neemuch, Madhya Pradesh-based 151 Mw project. The Asian Development Bank also made its first equity infusion in India as part of a $50-mn commitment into the company.
The latest deal could also open up a liquidity pipeline for GE Energy Financial Services, an arm of American multinational conglomerate General Electric. Two years ago it had agreed to invest $24 million in a 151-megawatt solar photovoltaic power project built by Welspun Renewables at Neemuch in Madhya Pradesh.
The deal would also open up an exit opportunity for multilateral development finance agency Asian Development Bank, which had signed an agreement to make an equity investment of $50 million in Welspun Renewables.
Tata Power will use its abilities through technological intervention to increase the power generation, “Although our investments in solar are limited, we have tremendous experience in managing solar projects due to Tata-BP solar business,” Sardana said.
He added that investments have come at a time when prices of silicon are stable, solar power tariffs are firms and prices of other equipment such as Balance of Plant, which is required for solar projects are reasonable.
Thereby, the deal seems to be a great page turner for the Tata Group by increasing the market value of the company and making it the market of excellence starrer in renewable energy sector.
 BY: DEVIKA SHARMA