THE EVOLUTION OF GREENKO (GKO)

Greenko Energy to prepay bonds worth $500 million

Greenko Energy Holdings, one of the largest clean energy companies in the country, is set to prepay a tranche of $500 million of its dollar bonds that would mature in August this year using its near-term cash flows, people familiar with the matter told ET. The company clocked $625 million in Ebitda (operating profit) in FY22 and is expected to close fiscal year 2023 at $650 million on revenues of $720 million.

These papers, linked to a "restricted group" of 500MW of renewable assets and issued in 2015, are among the first high-yield bond instruments from India. This development comes just days after it fully redeemed the entire outstanding $435 million bonds, due for maturity in March, having refinanced them through a bridge loan from global banks JP Morgan, Barclays, DBS Bank, among others, amid hardening rates, ET reported on February 22. It paid investors in full their principal amount together with accrued and unpaid interest. These two developments will help the company extinguish $1 billion of its outstanding bonds.

The Hyderabad-based company is among the largest issuer of green bonds at $4 billion, backed by GIC of Singapore, Abu Dhabi Investment Authority, Orix Corporation of Japan . Greenko's current operating portfolio is 7.3GW from 114 projects spread across 15 states.

"Bond markets have been the worst affected in 2022, both on the supply and yield sides," said the CFO of a renewable company who did not wish to be quoted. "If Indian corporates start pre-paying, then 2023 will hopefully restore the confidence of the bond markets toward energy transition stories from emerging markets like India. In the past, Indian state-owned or private banks were aggressive in the project finance market but in the last few years, it has largely been funded by the global bond markets. But with several renewable companies missing their financial targets, the market sentiments have been weak and that, in turn, has seen muted capacity."

Last month, the company said it would be investing ₹10,000 crore to set up a pumped storage project (PSP) near Gandhi Sagar in Neemuch District of Madhya Pradesh. In 2022, it partnered with Singapore-based Keppel Infrastructure Holdings (Keppel Infrastructure) to jointly produce at least 250,000 tonnes of green ammonia per year. In September, Korean steelmaker Posco Holdings partnered with Greenko subsidiary ZeroC for producing green hydrogen, ammonia and related derivatives in India for both the domestic and export markets.

Greenko Group to set up Pumped Storage Project in MP's Neemuch

The Greenko Group, one of India's leading energy transition companies, will invest Rs 10,000 crores in a Pumped Storage Project (PSP) near Gandhi Sagar in Madhya Pradesh's Neemuch district.

According to a release, the Greenko Group will set up the PSP with a daily storage capacity of 11 GWh (Gigawatt hours). The infirm renewable electricity stored in the PSP project during lean demand hours shall be later despatched to help meet the state's evolving peak power demand, thus resulting in considerable cost savings.

Besides, the PSP project shall enable MP state to meet its statutory RPO (Renewable Power Obligation) and the recently notified ESO (Energy Storage Obligation) targets.

This project is expected to provide employment to over 4,000 people. Greenko currently operates wind and solar of over 500 MW capacities, across five districts of Madhya Pradesh.

Greenko's PSP is expected to be commissioned by December 2024 and will be connected to the ISTS (Inter-State Transmission System) network.

Chief Executive Officer (CEO) and managing director (MD) of Greenko Group, Anil Chalamalasetty said, "The Group is committed to transforming renewable energy from intermittent and inflexible energy to firm, dispatchable and on-demand energy controlled through digitisation and long duration storage solutions to support the economy-wide shift towards carbon-free energy".

"The project of this scale has been possible due to policy support at national level and under the leadership and guidance of Madhya Pradesh Chief Minister Shivraj Singh Chouhan. Madhya Pradesh's favourable topography and resources along with world class infrastructure will help us to build this project in a cost-effective and timely manner," he added.

Granules forges strategic partnership with Greenko ZeroC for Kakinada plant

Drug maker Granules India on Tuesday said that it has entered into a strategic partnership with Greenko ZeroC to develop and promote carbon-free energy and green molecule solutions. According to the company’s statement, the firm entered into the partnership to “collaborate for Green Molecule Solutions and its wider applications in pharmaceuticals to build a leadership position in sustainability and circular economy initiatives and be a pioneer in the industry.” In a first-of-its-kind collaboration, the companies will be developing and promoting “state-of-the-art Integrated Green Pharmaceutical Zones (GPZ)” in Andhra Pradesh’s Kakinada. The facility would be spread across 100 acres for the project with an estimated cost of approximately Rs 2,000 crore over five years.

Granules informed that it will be building a green field facility based on sustainability principles for large-scale manufacturing of key starting materials (KSMs), Intermediates, APIs and fermentation-based products. Under the collaboration, Greenko ZeroC will be supplying carbon-free energy and enable green hydrogen along with its various chemical derivatives. Granules plans to utilise them to produce value-added products such as DCDA, PAP, Paracetamol, Metformin, other APIs, and Intermediates.

“Granules will also manufacture energy-intensive fermentation-based products at this facility using carbon-free energy. This collaboration allows utilization of Fungible Carbon Offset instruments across Granules global manufacturing locations,” the company said. Commenting on the partnership, the Chairman and Managing Director of Granules Dr Krishna Prasad said that it will power Granules’ sustainability journey by minimizing carbon footprint and impact of their operations on the environment. “Sustainability and green chemistry are key pillars of our commitment to heal the planet and people through minimizing carbon footprint, adopting resource-efficient processes, and reduce waste across our value chain,” he added.

Greenko CEO and Managing Director Anil Kumar Chalamalasetty called the collaboration an innovative and pioneering one, which “will propel the transformation of industrial manufacturing to be more sustainable and competitive with technologically superior and green solutions.” “Such partnerships will enable PM Modi Ji’s vision of India’s leadership in the global efforts to combat Climate Change and catalyze India’s and the world’s decarbonisation,” he added.

Greenko places lowest bid for energy storage tender by NTPC

New Delhi: GIC Holdings Pte Ltd, Abu Dhabi Investment Authority and Japan’s ORIX Corp. backed Greenko Group said it has placed the lowest bid for the world’s first and largest technology agnostic energy storage tender floated by power producer NTPC Ltd.

Greenko was the lowest bidder for 3,000 mega watt hours (MWh) tender called by state run firm’s unit NTPC Renewable Energy Ltd, with Italy’s Enel Group Indian arm Enel Green Power (EGP), JSW Neo Energy Ltd, Hinduja Renewables Energy Private Ltd, HES Infra Pvt Ltd, and India Grid Trust (IndiGrid) also in the fray. Greenko’s lowest bid was for ₹5 per kWh on a single cycle per day basis, with effective storage charges to be far lower than ₹2.5 per kWh.

Queries emailed to the spokespersons of NTPC Ltd and Enel Green Power were not immediately answered. Hinduja Renewables Energy Private Ltd, HES Infra Pvt Ltd, and Indigrid couldn’t be immediately contacted. Greenko has India’s largest operational clean energy portfolio of 7.5 gigawatt (GW) and is building 50 gigawatt hour (GWh) of storage capacity on pumped storage technology (PSP), as part of its plan to set up an energy storage cloud platform of 100 GWh. National Investment and Infrastructure Fund’s (NIIF) Ayana Renewable Power Pvt. Ltd. has also partnered with Greenko Group to store 6-GWh of power in hydro pump storage plants that Greenko is building at Pinnapuram in Andhra Pradesh. “This storage tender is an inflection point in the global energy transition journey as it establishes model for procurement of long duration energy storage capacity by RE Generators and utilities for creating decarbonized power supply solutions to meet the net-zero requirements of the nation," Greenko said in the statement.

With India committing to net-zero carbon emissions by 2070, increasing non-fossil energy capacity to 500 GW by 2030 and reducing carbon intensity of its economy by 45 % as against 2005 level; energy storage is expected to play an important role. According to India’s peace power sector planning body Central Electricity Authority (CEA), by 2030, the country’s power requirement would be 817GW, more than half of which would be clean energy. Also, according to CEA, the country requires 27 GW of battery storage by 2030 with four hours of storage and 10 GW of hydro pumped storage plants (PSP). India’s electricity storage space is expected to be a vital part of the energy transition. The idea is to store cheap green power during off-peak hours in pump storage projects and release it for consumption when the electricity demand increases. The union government is also trying to leverage India’s hydropower potential to facilitate the world’ largest energy transition, as they offer ideal solution to meet peak load. Large battery storages that store electricity in the form of chemical energy or electrochemical energy and re-convert it to electricity can also help India’ electricity grids, given the intermittent nature of electricity from clean energy sources such as solar and wind.

Serentica Renewables partners with Greenko for 1500 MWhr of storage capacity

PE fund KKR & Co-backed clean energy platform Serentica Renewables has entered into an agreement with Greenko Group, to source 1500 MWhr energy storage capacity through Greenko’s pumped storage projects located in India.

As part of this partnership, Serentica will leverage Greenko’s energy storage capacity from its upcoming Off Stream Closed Loop Pumped Storage Projects (OCPSP) at Pinnapuram in Andhra Pradesh and Gandhi Sagar in Madhya Pradesh, said a company statement. This arrangement will enable Serentica to deliver round-the-clock, firm, and dispatchable renewable energy to its various industrial clients, it added.

Greenko Group is the world’s largest energy storage company and one of the largest clean energy companies globally. Established in 2022, Serentica Renewables is focused on industrial decarbonization and aims to provide assured, renewable energy through a combination of solar, wind, energy storage and balancing solutions. Serentica’s medium term goal is to install 5,000 MW of carbon-free generation capacity coupled with different storage technologies and supply over 16 billion units of clean energy annually and displace 20 million tonnes of CO2 emissions, added the statement. The platform is 100% held by Twinstar Overseas which also owns controlling stakes in Sterlite Power Transmission Limited & Sterlite Technologies Ltd. Twinstar Overseas is owned by Volcan Investments Ltd, Bahamas, the holding company of the family trust of Vedanta Group’s Anil Agarwal. Recently, Serentica has secured $400 million investment from global investment firm, KKR.

“ Facilitating the usage of renewable energy through the promotion of both new and proven storage technologies will hold the key to large scale decarbonisation in India. We are excited to partner with Greenko in our endeavour to accelerate India’s energy transition towards a carbon neutral future," said Pratik Agarwal, Director of Serentica Renewables. “We strongly believe that carbon free energy solution is the way forward and can create a distinct value proposition for Indian manufacturing sector and allow it to target international markets hereto inaccessible and/ or less viable," said Anil Chalamalasetty, Founder and Managing Director of Greenko.

GIC oF Singapore, ADIA, Orix backed Greenko Group has an installed capacity base of 7.3 GW across solar, wind and hydro generation technologies spread over ~100+ projects across 15 states and delivering 20+ Bn units of renewable energy annually across the country constituting ~1.5-2% of total India electricity needs.

Keppel Infrastructure partners Greenko for green ammonia

Singapore-based Keppel Infrastructure Holdings Pte Ltd (Keppel Infrastructure) has tied up with Greenko Group (Greenko), to jointly explore green ammonia and renewable energy opportunities to meet the growing demand for low carbon energy in India, Singapore, and globally. The MoU will explore the feasibility of jointly developing a production facility which can produce at least 250,000 tonnes of green ammonia per year, the companies said today. Keppel Infrastructure (KI) is a wholly-owned subsidiary of Keppel Corporation, a Singapore flagship multinational company providing solutions for sustainable urbanisation. In addition, the companies will jointly identify and evaluate a portfolio of solar and wind energy projects, up to an installed capacity of approximately 1.3 GW, with an investment of $1.5 billion, complemented by pumped hydro-storage, to power the green ammonia production facility.

Green ammonia is made with green hydrogen that comes from water electrolysis powered by renewable power. Greenko will produce the green ammonia in India and export the molecules to Singapore. It will use ammonia for industrial use or split it further using its own 6GW turbine to split it further into green hydrogen. The turbine will run on solar and wind power. As more countries journey towards net zero emissions to fight climate change, there is a growing interest internationally to use green ammonia as a direct feedstock for carbon-free energy generation, because when it is used as a fuel, green ammonia does not generate any CO2. Green ammonia can also be used as a hydrogen carrier to provide green hydrogen solutions for hard to abate sectors like chemical and heavy industries.

The International Energy Agency recognised ammonia - along with hydrogen - as an important fuel for future electricity generation. Cindy Lim, CEO of Keppel Infrastructure, said, "This MOU with Greenko further underlines Keppel's strategy to be at the forefront of providing innovative, sustainable energy solutions to help the world combat climate change. This is in line with Keppel's Vision 2030, which places sustainability at the core of the Group's strategy." The collaboration between KI and Greenko will also support India's goal to manufacture five million tonnes of green hydrogen per annum by 2030 and become a production and export hub for the fuel.

Anil Kumar Chalamalasetty, CEO and Managing Director at Greenko said, "The transformation of India from a carbon-based fossil energy importer to an exporter of renewable energy-derived products like green hydrogen, green ammonia, and other green molecules, is the cornerstone of Greenko' s strategy for future growth. Along with Greenko's Intelligent Renewable Energy Storage Platform (IRESP) and foray into electrolyser manufacturing, partnerships like these with Keppel are key enabling aspects in an accelerated execution of this vision."

JSP SIGNS MOU WITH GREENKO FOR 1000 MW CARBON-FREE ENERGY

Naveen Jindal-promoted Jindal Steel & Power, has signed an MoU with Greenko Group to facilitate 1000 MW of carbon-free energy for its steel-making operations at Angul, Odisha. The MoU signing is keeping in line with its goal to become a net zero steel company by 2035. As per a release issued by the steel-maker, Greenko will assist JSP in design of the comprehensive energy solution - including the design & development of the associated renewable energy capacity, identification of potential strategic investor(s) for the RE capacity and making available energy storage capacity.

Target

The proposed 1000 MW carbon-free energy is targeted to meet the existing and incremental power demand of JSP’s Angul facility. Once completed, it will ensure the reduction of approximately 7 million tonnes of CO2 annually.

Energy storage capacity

As part of the proposed transaction, Greenko Group shall offer energy storage capacity from its Off-Stream Closed Loop Pumped Storage Project (OCPSP) under development in Madhya Pradesh and Rajasthan. “We already have Green Hydrogen ready DRI units present at Angul using syn-gas,” Bimlendra Jha, Managing Director, Jindal Steel & Power said.

ONGC ties up with Greenko for green hydrogen foray

NEW DELHI: State-run ONGC is planning a joint venture with Hyderabad-based renewables major Greenko group for foraying into the green hydrogen and green hydrogen derivatives market.

The joint venture will develop a green ammonia production and storage facility for export purpose. The facility will have a capacity to produce one million tonne per annum of green ammonia through a 1.3 gigawatts (GW) green hydrogen plant, leveraging Greenko's exclusive partnership with John Cockerill.

The project will need about 6 GW of solar and wind power coupled with Greenko's pumped-hydro energy storage platform to generate 1.4 GW of round-the-clock renewable power, the companies said in a joint statement.

Greenko, John Cockeril join hands for hydrogen electrolyzers

Greenko ZeroC (GZC), a subsidiary of Greenko Group and John Cockerill, a Belgium-based designer and manufacturer of high-capacity alkaline electrolyzers have signed a framework agreement to exclusively partner in joint market development initiatives for Green Hydrogen Electrolyzers in India.

The tie-up would accelerate the deployment of the green hydrogen ecosystem in India and enable building a gigawatt electrolyser manufacturing plant, with target to ramp up to two gigawatt.

GZC and John Cockerill will combine their strengths to collaborate in all spheres of market evolution for green hydrogen electrolyzers, converting clean energy into carbon free hydrogen.

The pressurised alkaline technology provided by John Cockerill and being the best adapted to the "large scale" hydrogen applications along with Greenko’s lowest cost RE-RTC (round the clock) solutions will enable the lowest Levelised Cost of Hydrogen necessary for the implementation of a large H2 ecosystem in India.

The Gigafactory will include, the full manufacturing electrolyser value chain, including modern nickel coating and will produce electrolysers delivering H2 at 30 bars at the outlet at the highest purity level.

Greenko is already building capacity to cater to the rapidly evolving green hydrogen market globally.

Greenko aims to deliver internationally cost-competitive green hydrogen and associated green molecules.

John Cockerill is, among other technologies, developing the world’s highest capacity electrolysers (6.5 MW commercial) and manufacturing facilities across the globe.

This partnership will facilitate low-cost hydrogen production by enabling delivery of electrolyzers at scale in India, within the next years.

The developments in the H2 industry will help large local industries (refineries, fertilizer plant and steel), the implementation of a large-scale energy ecosystem focused on renewable energies (PV, wind, hydro) and the development of H2 mobility in India.

Anil Chalamalasetty, Greenko, MD, said, the company is partnering with a world-class technology partner in John Cockerill and will jointly develop large-scale green molecule projects in India, accelerating the creation of a hydrogen economy.

Raphael Tilot, CEO, John Cockerill Renewables, said, the partnership will contribute to India’s emergence as a new green energy hub with abundant natural resources, a large domestic market and the potential to cater to the growth of this market globally.

ArcelorMittal, Greenko to set up $600 mn renewable energy project

The world’s second largest steel producer, ArcelorMittal, has entered into a strategic partnership with one of India’s leading renewable energy companies, the Greenko Group, for a project that will power the decarbonisation journey of ArcelorMittal Nippon Steel India (AM/NS India).

The contours of the arrangement are like this: The two companies will work together to construct a “round-the-clock” 975 Mw of nominal solar and wind capacity project. The $600 million project, which will be supported by Greenko’s hydro pumped storage project, will be owned and funded by ArcelorMittal. Greenko will design, construct and operate the renewable energy facilities in Andhra Pradesh, South India. AM/NS India – ArcelorMittal’s joint venture in India – will sign a 25-year offtake agreement with ArcelorMittal to purchase 250 Mw of renewable power annually from the project.

The commissioning is expected by mid-2024 and the transmission will be through Power Grid Corporation of India.

According to the statement, this will result in over 20 per cent of the electricity requirement at AM/NS India’s Hazira plant coming from renewable sources, reducing carbon emissions by approximately 1.5 million tonnes per year.

The project offers AM/NS India the dual benefits of lower electricity costs and lower CO2 emissions, and it also provides an attractive return on investment for ArcelorMittal, the statement further said.

ArcelorMittal has a 60 per cent equity interest in AM/NS India. In 2019, it had acquired Essar Steel jointly with Nippon Steel under the insolvency law and the joint venture was named AM/NS India.

Commenting on the partnership with Greenko, Aditya Mittal, CEO, ArcelorMittal, said, “This is an attractive opportunity for ArcelorMittal. We will be partnering with a highly experienced energy transition company in a project that will enable our joint venture company AM/NS India to reduce both its electricity costs and carbon emissions, as well as providing consistent, guaranteed returns for ArcelorMittal.”

“Large amounts of green energy are one of the key foundations for both a net zero economy and a decarbonised steel industry.

We are excited about the potential of replicating this model in other regions. It demonstrates how establishing partnerships and collaborating across the supply chain can help us to progress faster towards our decarbonisation targets,” Mittal said.

The steel industry contributes between 7 and 9 per cent to global emissions, and players across the world are setting goals for reducing their carbon footprint. ArcelorMittal has set a target of 25 per cent global reduction in CO2 emissions intensity by 2030 at an anticipated cost of US$10 billion.

Dilip Oommen, CEO, AM/NS India, said, “The strategic renewable energy project reinforces our firm commitment towards sustainability that lays strong emphasis on decarbonisation of steel. The partnership is the right step towards our quest to reduce carbon footprint, enabling India to accelerate the transition towards a green economy.”

Commenting on the partnership with ArcelorMittal for the project, Anil Kumar Chalamalasetty, CEO and managing director at Greenko said, “This is a pioneering partnership with the world’s leading steelmaker and we hope it will serve as a blueprint for the adoption of renewable power for large-scale steel manufacturing in India. These efforts will also represent a notable contribution to India’s own commitment to build 500 GW of renewable energy capacity by 2030.”

In India, steel companies are on an expansion mode. Adopting technology and processes to keep carbon emissions in check while growing is what companies are looking at.

AM/NS India is looking to debottleneck operations to 8.8 mt capacity by 2023. Further, there are plans to expand capacity at Hazira to at least 14.4 mt and a greenfield expansion in Odisha is also expected.

At present, AM/NS India’s power requirement is approximately 1,000MW of which Hazira accounts for about 800MW.

ArcelorMittal ties up with Greenko Group to develop a renewable energy project of 975MW nominal capacity

The $600 million project will be owned and funded by ArcelorMittal; Greenko will design, construct and operate the renewable energy facilities in Andhra Pradesh

AM/NS India will enter into a 25-year offtake agreement with ArcelorMittal to purchase 250 MW of renewable electricity annually from the project

Greenko to supply 6 GWhr of electricity to Adani group

Will supply power from Greenko’s ‘pumped hydro storage’ capacity in Madhya Pradesh, Rajasthan Greenko, one of India’s larger renewable energy developers, has entered into a tie-up with the Adani group, a leading infrastructure conglomerate, under which Greenko will supply up to 6 GWhr of power the Adani group’s proposed industrial complex. The power will come from Greenko’s ‘pumped hydro storage’ capacity that is coming up in Madhya Pradesh and Rajasthan.

A similar deal was announced last month between Greenko and Ayana, a CDC-backed renewable energy company, based in Bengaluru. Here again, Greenko would supply 6 GWhr from its pumped hydro storage coming up at Pinnapuram, Andhra Pradesh.

‘Pumped hydro storage’ plants are those in which two reservoirs of water would be built, with a height difference between them. When the water flows down, it will be used to generate electricity. Once the lower reservoir is filled, the water will be pumped up to the upper one, completing the loop. Pumping up happen when electricity is available in surplus or cheap.

Typically, the water is sourced “one-time” from another, larger reservoir behind a dam. For instance, water for the Pinnapuram project is proposed to be sourced from the Gorakallu Reservoir one-time, with an arrangement to top-up any evaporation losses. Since the power that comes from pumped hydro projects is non-fossil fuel based (green) and supplied round-the-clock, the Adani industrial complex will among the greenest industrial complexes in the world, says a press release from Greenko. The Greenko group has an installed capacity of 7.3GW across wind, solar and hydro, spread over more than a hundred sites in various States. It also has 30 GWhr of energy storage projects under construction, as part of its plan to develop 100 GWhr of energy storage.

Ayana & Greenko tie up for India’s 1st power storage biz

NEW DELHI : National Investment and Infrastructure Fund’s (NIIF) Ayana Renewable Power Pvt. Ltd. has partnered with Hyderabad-based Greenko Group to store 6-gigawatt hour (GWh) of power in hydro pump storage plants that Greenko is building at Pinnapuram in Andhra Pradesh, the companies said.

The arrangement will help provide round-the-clock green energy to user industries and electricity distribution companies (discoms). The idea is to use cheap green power during off-peak hours to raise water to a height and then release it into a lower reservoir to generate electricity when the demand for electricity goes up.

“In a first of its kind partnership, Greenko Group and Ayana Renewable Power Pvt. Ltd have entered into an arrangement to provide standalone storage capacity to develop firm and dispatchable RE solutions, including round-the-clock power supply of up to 1GW," the firms said in a joint statement. Large storage facilities can help keep India’s power grids stable, given electricity is produced intermittently from clean energy sources such as solar and wind.

This comes against the backdrop of the Union budget including energy storage systems such as dense charging infrastructure and grid-scale battery systems in the harmonized list of infrastructure, making it easier for such projects to raise funds.

“This will be offered to various industries and distribution companies in India. Greenko Group has offered in total 6,000 MWhr of storage capacity including 1,500 MWhr of storage capacity in the first tranche from its unique Off Stream Closed-Loop Pumped Storage Project (OCPSP)," according to the statement.

Backed by GIC Holdings Pte Ltd, Abu Dhabi Investment Authority and Japan’s ORIX Corp., Greenko has India’s largest operational clean energy portfolio of 7.3 GW and is building 30 GWh of storage capacity as part of its plan to set up an energy storage cloud platform of 100 GWh. This comes amid a new ‘Energy Storage System’ (ESS) policy that has proposed no requirement for environment clearances for off-river pumped storage plants and no obligation for free power to the states concerned, as reported by Mint earlier.

India may also delicense building of standalone battery storage systems; allow their sale, lease or hire; and permit the sale of stored power through power purchase agreements and over exchanges, as part of the proposed ESS policy. Also, the electricity transmission cost while selling or buying electricity from these storages may be waived off, according to the ‘Discussion Paper on Policy on Energy Storage Systems’.

Greenko Group signs up to become a Net Zero Carbon by 2040

Hyderabad: Greenko has signed up for “The Climate Pledge” by joining over 200 companies who have pledged to achieve the net-zero carbon target by 2040, a decade ahead of the Paris Agreement goal.

Today’s announcement responds to the findings of the latest United Nations’ Intergovernmental Panel on Climate Change (IPCC) report, which underscores the need for urgency in addressing the climate crisis.

“As a leading renewable energy company with an operational portfolio of 7.5 GW and a pipeline of 15 GW of wind, solar, hydro, and energy storage assets spread across 15 States in India, Greenko is joining The Climate Pledge and making the commitment to achieve net zero carbon emissions by 2040 — 10 years ahead of the Paris Agreement. Greenko will continue to build upon its hallmark of environmental stewardship, through greenhouse gas mitigation, climate risk management, conservation and restoration of habitats, as well as circular economic approaches,” said Anil Kumar Chalamalasetty, Founder, CEO and MD, Greenko Group.

Unless there are immediate reductions in greenhouse gas emissions, limiting warming to close to 1.5 degrees Celsius or even 2 degrees Celsius will be out of reach.

Businesses have long contributed to the effects of climate change, but deep cuts in emissions of greenhouse gases could stabilize increasing temperatures.

The Climate Pledge is prompting more action to tackle the climate crisis. Signatories to The Climate Pledge agree to measure and report greenhouse gas emissions on a regular basis; implement decarbonization strategies in line with the Paris Agreement through real business changes and innovations, including efficiency improvements, renewable energy, materials reductions, and other carbon emission elimination strategies and neutralize any remaining emissions with additional, quantifiable, real, permanent, and socially beneficial offsets to achieve net-zero annual carbon emissions by 2040—a decade ahead of the Paris Agreement’s goal of 2050.

Sovereign funds GIC, ADIA to infuse Rs 3,430 Cr into Greenko

Mumbai: Sovereign wealth funds GIC of Singapore and Abu Dhabi Investment Authority (ADIA) on Tuesday signed definitive agreements to make a $495 million (Rs 3,430 crore) fresh equity investment in Greenko, increasing their bet on the Indian renewable energy sector.

The Hyderabad-based company plans to use the proceeds predominantly to partfund its storage projects totalling 2.4 gigawatts. These projects, with a total capital outlay of $2 billion, are expected to be completed and become operational in 2022. It has already secured financial closure for the Pinnapuram storage project and is in advanced discussions to raise funds for the Saundatti project.

“The proposed equity commitment from the existing shareholders shows Greenko’s track record in creating longterm value to all its stakeholders,” said managing director Anil Chalamalasetty.

India is transitioning from an energy deficit market to one where contracts are driven by demand for reliable, flexible and cost-competitive energy, said Chalamalasetty, who is also the company’s chief executive.

Greenko is focussing on building integrated renewable energy assets with storage to address these mar kets by competing with conventional energy assets like thermal in quality, quantity and cost, he added. This approach has led in part also to Greenko’s pivot from a generation-focussed company to a more holistic solutions provider, striving to feed peak grid demand with power from clean sources.

In India, coal cannot satisfy demand that peaks in summer. But with an increase in renewable energy supply from a variety of new sources, existing grid infrastructure cannot absorb more than 15% of the supply.

Renewable supply also remains unpredictable, being dependent on the vagaries of nature. GIC will continue to remain the principal shareholder of the company after this fresh round of capital infusion. This will be the third round of capital infusion by the two, making the company the biggest recipient of foreign capital in the clean energy space in the country.

Once they completed this round, the two principal sponsors of the company would have put in a total $2 billion in the 13-yearold company. GIC, which holds a 60% stake, alone has infused $1.4 billion. With $3.2 billion of debt, Greenko’s enterprise valuation is expected to be at $5.2 billion.

ET wrote about the planned fundraising in its February 21edition.

“Greenko is well-positioned to execute the Integrated Renewable Energy projects,” said Ang Eng Seng, chief investment officer of infrastructure at GIC. “Its innovative use of hydro storage and renewable power will enable utilities to mitigate the intermittency issues of renewable power, facilitate the increased penetration of renewable power and reduce the country’s reliance on conventional thermal power overtime.”

Greenko has an operational capacity of over 4.2 GW (DC Capacity of 4.7 GW) across wind, solar and hydro projects. Set up in 2006 by first-generation entrepreneurs Mahesh Kolli and Chalamalasetty, Greenko has a presence in 13 states. It is estimated to have made Ebitda (earnings before interest, tax, depreciation and amortisation) of $500 million in fiscal 2019.

The founders own a quarter of Greenko, while ADIA has 15%. GIC is a leading global investment firm with well over $100 billion in assets under management. Other renewable power companies in India are also getting fresh funding. Existing investors Goldman Sachs, ADIA and CPPIB are infusing $300 million in Renew Power through a combination of equity and debt, ET reported last week.

GIC, ADIA to put $450 million into Greenko

MUMBAI: Hot on the heels of the billion-dollar acquisition of Orange Renewables, Greenko’s key shareholders GIC of Singapore and Abu Dhabi Investment Authority (ADIA) have agreed to infuse another $450 million to bankroll the company’s next phase of growth. This involves 15 GW of integrated, round-the-clock renewable assets combining hydro, wind and solar with the latest storage technologies.

This will be the largest single round of capital raising by a green energy company in India, overshadowing previous initiatives by Re-New Power Ventures that received $247 million in April for Ostro Energy’s buyout. Greenko Group on Monday announced the acquisition of Orange Renewable from Singapore’s AT Capital Group at an enterprise value of $1 billion. ET reported this ahead of the announcement.

After this round, both investors will have cumulatively invested $1.3 billion with GIC alone putting in $1 billion since 2015 in four rounds.

Addressing Needs of Discoms GIC will remain the controlling shareholder with a 60% stake

The two first-generation founders, Anil Kumar Chalamalasetty and Mahesh Kolli, control about 25% while ADIA holds the remaining 15%.

“We will not pursue standalone renewable assets. Our focus for the next three-five years will be on building integrated round-theclock renewable energy which can compete with base load curves to address the real needs of the discoms when our Indian energy market is transitioning from a deficit market to a real demand-driven market,” Greenko group CEO Chalamalasetty told ET.

“Our new assets will compete with conventional coal energy projects on quantity, quality and cost. We are working on building 15 GW round-the-clock renewable assets that will deliver 3GWs of base load. It’s a unique proposition but is required today.”

POWER OF THREE The plan is to have three strategic “integrated asset class” assets — one in the north and two in the south that are dispersed across the country to create a bundled form of energy supply. Most of the incremental investments will go into storage technology.

In recent months, there has been a big drop in new base load capacity addition while existing capacities have been operating at half of their rated levels.

Close to 40 GW of base load assets are facing coal supply crunch or other disruptions. Gujarat recently saw a base load drop of 5GW. As a result, spot prices on the electricity exchanges have spiked to Rs 11-12 per unit from Rs 3 per unit earlier.

Renewables are a 5-10% additional energy source on top of the base load powered by coal and gas.

The challenge facing India’s power grids is the base load and clean energy on its own cannot be a replacement.

“Renewable got the tag of cheap energy but it is destabilising the grid. Coal is of course firm energy but in the last few months both crude and coal prices have gone up. We don’t have a fixed-price, inflation-protected energy,” said Greenko joint managing director Mahesh Kolli.

“In most markets, gas acts as a flexible base load energy to support renewables but we do not have that option with domestic gas and LNG imports cannot be a cheaper alternative either, so the discoms are all feeling the heat of this. We think we can create value — the capital infusion will support that growth plan.”

The Central Electricity Authority (CEA) reported a month ago that the more renewable energy is pumped into the distribution networks, the more expensive it gets for the grid.

According to its calculations, every unit of energy from renewables is costing the discoms an incremental Rs 2 to Rs 2.50 per kilowatt hour.

“We will be integrating multiple storage technologies like batteries, hydro, with wind, solar and hydro and creating an integrated round-the-clock (RTC) renewable energy asset class to meet the discoms’ cost-effective base load energy growth needs while meeting the future Renewable Power Obligations targets,” said Chalamalasetty.

Most of the investments will go into storage technology. Battery prices are coming down but pumped hydro storage is becoming an important asset class.

“It’s common in Europe and also in Tehri Dam where during off-peak time, you pump to bring the water levels up and vice versa during peak hours,” Chalamalasetty said.

NEW STRATEGY However, the existing portfolio of 4.3 GW, inclusive of Orange, will not be part of this since they already have signed power purchase agreements (PPAs) with state utilities while the new assets will be meant for supplying to the national power gridNSE 0.91 % at high voltage.

Ever since losing the opportunity to acquire Reliance’s Mumbai power distribution business to Adani in 2017, Greenko has planning this new strategy, the executives said. Construction work is slated to begin later this calendar year.

Commenting on the Orange acquisition, the biggest by the company so far, Kolli said more than scale it was the geographical complementarity that helped.

“We are working with a large cluster approach in states where we operate,” he said. “Adding the (Orange) portfolio within those clusters is part of our business model. We did not acquire Orange because it has a gigawatt size portfolio, but because of the assets meeting the Greenko’s operational and financial benchmark returns.”

Greenko will add $10 billion in assets in 4-5 years

Mumbai: Set up in 2006 by first-generation entrepreneurs Mahesh Kolli and Anil Kumar Chalamalasetty, Greenko Group is backed by Singapore’s sovereign wealth fund GIC Holdings Pte. Ltd and Abu Dhabi Investment Authority. Greenko president and joint managing director Kolli, and Chalamalasetty, the CEO and managing director, in an interview spoke about the rationale behind the acquisition of Orange Renewables, besides sharing their views on the sector. Edited excerpts:

Did you pick Orange because there were not many gigawatt size firms available for buyouts?

Mahesh: For us, Orange is not an outcome of a strategic move. Our business model has a combination of inorganic and organic growth. Within that, we have our own matrix. To meet the financial benchmarks, we need to meet certain technical benchmarks. We are working with a large cluster approach in states where we operate. Adding this (Orange) portfolio is within those clusters, and is part of our business model. We did not acquire Orange because it has a gigawatt size portfolio, but because of the clear process that they were following.

How much are you paying for this?

Mahesh: It has an enterprise value of $1 billion, with an equity payout of $300 million. From the single equity cheque point of view, it will be our largest acquisition. In terms of size, SunEdison was larger.

How will this transaction be supported?

Mahesh: We have the balance sheet and the capital right now.

Anil: It will be supported through the cash flow and equity sources. Orange’s existing debt will be passed on to us.

Any more acquisitions after this?

Mahesh: We will continue to look at opportunities as long as they meet our financial and operating framework. We are very particular about our cluster approach and the technologies that come with these assets, and the states in which they operate. It has to make long-term financial returns from the shareholders’ perspective. As long as these two frameworks are working together, we will be willing.

Anil: As long as they are rightly built and have the right commercial agreements, and fall under our long-term views, we will definitely get going with them. We are a $5-billion platform today, with built-in reserves. We see energy as one of the strongest growth sectors; by how it is evolving and transforming. We strongly believe that we have entered a very exciting stage. We are going to add another $10 billion of assets in the next four to five years.

When will you go for your IPO?

Anil: We will not say no to it. But definitely not in the short-term.

Mahesh: We will, at some point in time, but we will only do it when we will be in the Nifty-50 type stocks.

Will ReNew and Greenko be the last of the big green energy firms standing once the ongoing consolidation gets over?

Mahesh: The fundamental difference is that we do not see ourselves as a renewable developer. We are in the energy market and utility market as a segment. Whether it is a ReNew, NTPC or NHPC, for us, the comparison is the energy market.

You have been making a pitch for the electricity distribution business. Where do you stand?

Mahesh: Our electricity distribution plan is driven by consumer access. We are reacting to opportunities.

Anil: Our ambition is to make a difference and impact towards the last mile consumer.

What are the specifics?

Anil: We are working with a lot of R&D companies. We are working with a lot of technology firms. We are trying to understand where the pain points for the consumers are. What are the opportunities which can evolve into energy play? It ranges from micro-grids to transmission and distribution, to storage, and towards electric vehicles. We don’t see distribution as the only bridge to reach the consumers. We are trying to build other opportunities and platforms as well. On transmission and distribution, we are open to do transactions at the right pricing.

Where do you see the green tariffs going from here?

Mahesh: Tariffs are a function of two things -- the real cost of technology and the returns on which the people are willing to work. This sector has matured to a great extent...Tariffs are stabilising at ₹3 per unit.