Funds worth more than $1 billion have been raised so far this year for its wind and solar business by the Indian startup ReNew Power.
In addition to that being a sign of investor confidence in ReNew, one of India’s best performing unicorns, it is also being seen as a sign of the shifting of the country towards renewable energy.
The total renewable power capacity of India is about 118 GW which is the fifth-highest in the world and includes its hydro electric power projects. The Indian government targets to raise increase that to about 500 GW by 2030.
With a generating capacity of about 5 GW, with another 3 GW of new projects built, ReNew is the largest independent renewable energy maker in India. The company owns more than 100 wind and solar plants that together generate about 1% of all total electricity generated in India. The company also owns a rooftop solar business with operations in about 20 states of the country.
“We are at the beginning of a fairly significant energy transition,” said ReNew Chairman Sumant Sinha, who founded the company eight years ago. “Historically, India’s energy has been based on coal, primarily for generating electricity,” he told the media in an interview. “But now renewables have become so much cheaper, about 30 or 40% cheaper than coal, that going forward a large part of the demand is going to be met through renewable energy sources.”
According to an International Renewable Energy Agency survey, the cheapest solar power is produced currently by India. According to a report published last year, India is also home to five of the 10 largest solar power parks of the world that are currently under construction.
Sinha credits the government of Narendra Modi with promoting a transition towards renewables.
“When Mr. Modi became prime minister in 2014, we had about 20,000 megawatts of both wind and solar installed,” said Sinha. “At that point, he set a target of getting, by the end of 2022, almost 175,000 megawatts of wind and solar installed … and that is actually quite remarkable.”
$300 million from investors was raised by ReNew at the end of June woih a contribution of $100 million each by Goldman Sachs, Abu Dhabi Investment Authority, and Canada Pension Plan Investment Board.
The Indian unicorn shelved its plans for an IPO earlier this year and managed to get debts of $350 million from the Overseas Private Investment Corp — the US government’s development finance institution. It also raised $375 million by issuing green bonds.
Greenko Energy Holdings is another Indian company that is benefiting from the growing interest in clean energy. $495 million in the Hyderabad-based company was invested in June by sovereign wealth funds Abu Dhabi Investment Authority and GIC Holdings Pte Ltd.
“Irrespective of how rapidly we set up new solar plants, you will always have a gap in which you will need coal to play a bigger role,” Sinha said.
(Adapted from CNN.com)