- Tata Power Renewable Energy signs share purchase agreement with Welspun to acquire Welspun Renewables Energy
- Media reports had earlier suggested the deal is worth $1.45 billion, though there is no confirmation
- Tata Power now has a renewables assets portfolio of 2,300 MW, which includes 990 MW of solar projects of Welspun and 150 MW capacity of wind projects
- Tata Power claims that the Welspun acquisition has made it the largest renewable power company in India
Take Over Rumors on Renewable Assets Worth $1.45 Billion Between Indian Industry Giants
(02. May 2016)
Privately owned Indian power company Tata Power Company is acquiring the renewable energy arm of Welspun Energy Private Limited. On June 12, 2016, it announced that the company has signed a share purchase agreement (SPA) with Welspun to acquire its subsidiary Welspun Renewables Energy Private
Limited (WREPL). Tata’s take over of WREPL is handled through its subsidiary Tata Power Renewable Energy Limited (TPREL).
Media reports in May 2016 had suggested that Tata is going to spend $1.45 billion, which includes debt, to fund this acquisition. This offer was reportedly 15 to 20% higher than what other suitors, a consortium of IDFC Private Equity and Fortum, had quoted (see Tata Welspun Deal?). However, the companies haven’t shared any financial details about the deal.
Tata Power’s CEO and Managing Director, Anil Sardana said, “This acquisition will enable the company to deliver significant value for all stakeholders as most of the assets are revenue generating and operating assets. Tata Power can further enhance value of these assets with its operational experience and financial optimization. The acquisition is also a significant step towards attaining the company’s objective of having non-fossil fuel based capacity up to 30 to 40% of its total generating capacity.”
WREPL has a total renewable energy portfolio of 1,140 MW across India, comprising 990 MW of solar projects, and 150 MW of wind projects. Out of the 1,140 MW, nearly 1,000 MW is operational, while the balance capacity is ‘under advanced stages of implementation’. Asian Development Bank and General Electric (GE) are some of the names that have invested in WREPL. In October 2015, it had secured funding of $617 million from undisclosed investors.
On the other hand, TPREL has operational renewable energy capacity of 294 MW, with 500 MW more to come from its parent company Tata Power. Out of its operational capacity, only 54 MW is solar power. Around 400 MW of solar and wind power projects are currently being implemented by TPREL. Now with the Welspun acquisition, the total renewable assets portfolio of TPREL comes to about 2,300 MW, which it claims, makes it the largest renewable power company in India.
TPREL had recently won 100 MW capacity for two solar power projects of 50 MW each in Karnataka’s Pavagada Solar Park through competitive bidding for a price of 4.79 INR per kWh ($0.07).