Azure Power Sells Non-Strategic Rooftop Solar Portfolio

• Azure Power has entered a binding agreement with Radiance Renewables to sell 167 MW rooftop solar portfolio calling it a non-core business segment
• It enables Azure to optimize costs and recycling capital into higher return, committed projects, the management explained
• The deal allows Radiance Renewables to expand its portfolio in the C&I and residential segments

Indian solar power producer Azure Power Global Limited is set to sell its 'non-core' solar rooftop. It is the New York Stock Exchange (NYSE) listed company's 1^st ever asset sale. According to the company website, its total rooftop solar portfolio stands at 167 MW.

"The sale of this non-strategic portfolio allows us to enhance returns on invested capital through efficiency gains and cost optimization whilst recycling capital into higher return, committed projects. Our focus is on creation of shareholder value," explained Azure Power CEO Ranjit Gupta.

Under a binding agreement signed with distributed generated renewable energy company for C&I and residential segment, Radiance Renewables Pvt. Ltd., Azure Power will sell the portfolio for INR 5.365 billion ($73.5 million). The rooftop solar portfolio generated INR 331 million ($4.5 million) in EBITDA for calendar year 2020 for the company.

With this deal, Azure Power has revised its annual FY 2022 revenue guidance to INR 17.2 billion to INR 18.2 billion ($236 million to $249 million). Previously it had guided for annual revenues to reach between $245 million to $259 million (see Azure Power Narrowed Down Loss In Q3/2021).

Radiance Renewables is a 100% subsidiary of Green Growth Equity Fund (GGEF), managed by EverSource Capital, a 50:50 joint venture between asset investor Everstone Capital and UK based solar developer Lightsource bp. In July 2020, Lightsource bp's parent company bp committed $70 million into GGEF expressing its seriousness to invest in the Indian renewable energy sector (see UK Approves 50 MW Lightsource BP PV Project).

"This strategic acquisition will position Radiance as a significant pan India player in the commercial, industrial and institutional segments with exposure to long term power purchase agreements with quality customers based on net metering in the build out of its distributed generation platform," added Radiance Renewables' Executive Director Manikkan Sangameswaran.

Currently, Radiance manages 95 MW of operational solar power capacity in several states of India, with another 40 MW under construction and 60 MW under development. The company is targeting a portfolio of 1.5 GW of open access and behind-the-meter projects.

Azure Power Sells Non-Strategic Rooftop Solar Portfolio

Azure Power Sells Non-Strategic Rooftop Solar Portfolio