Petronas to pick 49% in ReNew project
1 min read 07 Jun 2023, 11:04 PM ISTAs part of the collaboration, Gentari Sdn Bhd, a subsidiary of Petronas, will acquire a 49% equity stake in NASDAQ listed ReNew’s 403 megawatt (MW) peak power project.
PremiumNEW DELHI : ReNew Energy Global PLC on Wednesday said it has entered into a partnership with Petroliam Nasional Bhd, Malaysia’s state-run oil and gas company.
As part of the collaboration, Gentari Sdn Bhd, a subsidiary of Petronas, will acquire a 49% equity stake in NASDAQ listed ReNew’s 403 megawatt (MW) peak power project.
First reported by Mint on 8 August 2022, the deal is part of Petronas’ plans to back green energy projects in India by tying up with ReNew at the project level.
The move reflects a broader trend of global oil companies, including industry leaders like Shell Plc, Total, and Thailand’s PTT Group, establishing a significant presence in the burgeoning green energy sector in India. As the hydrocarbon sector faces disruptions, other major players, such as Eni SpA from Italy, Statoil ASA from Norway and Russia’s Rosneft are also exploring opportunities in the green energy space.
“On 31 May, ReNew entered a partnership with PETRONAS’ clean energy subsidiary Gentari, , which will purchase a 49% equity stake in ReNew’s 403 MW Peak Power project. As a part of the partnership ReNew will invest approximately ₹3,130 million (~$38 million) for its 51% stake in the project and through its affiliates will undertake EPC, O&M, and project management for the project," ReNew said in a statement, while announcing its Q4 FY23 results.
In June 2022, Petronas set up Gentari Sdn Bhd, to accelerate adoption of clean energy and build a renewable energy capacity of 40GW. It plans to supply 1.2 metric tonnes per annum (mtpa) of green hydrogen and establish electric vehicle (EV) charging points across the Asia Pacific, with a focus on Malaysia and India.
Petronas was also looking to buy Continuum Green Energy (India) Pvt. Ltd for an enterprise value of $1.5 billion, Mint had reported. It first invested in India’s green energy space in 2019, acquiring Amplus Energy Solutions Pvt. Ltd, one of the largest rooftop solar power producers. It has also signed agreements with Karnataka and Tamil Nadu governments to invest ₹60,000 crore to set up green hydrogen and ammonia plants.
“The Peak Power project has a 25-year power purchase agreement with Solar Energy Corp. of India, a central government-owned entity with a AAA rating by ICRA, for supplying electricity at a peak tariff of ₹6.85/kWh (~$8.3¢) and an off-peak tariff of ₹2.88 per kWh (~$3.5¢)," ReNew added.
Mint reported earlier that as part of a capital recycling strategy, ReNew has been exploring opportunities, including sale of 1.1 GW clean power projects worth $450 million in equity value, and a 30% stake in its 2.3 GW commercial and industrial project portfolio.
ReNew had announced a similar agreement with Mitsui and Co. Ltd, with the Japanese firm picking up a 49% stake in its 1.3GW round-the-clock project comprising three wind and a solar firm, and a battery storage unit across Rajasthan, Karnataka and Maharashtra, respectively.
ReNew Power recorded a net profit of $1 million in the fourth quarter (Q4) of the last financial year (FY 2023), as compared to a net loss of $43 million in the corresponding quarter in FY 2022. The firm recorded a net loss of $61 million in FY23 as compared to a loss of $196 million in FY22.
“Adjusted EBITDA(2) for Q4 FY23 was INR 12,010 million (US$ 146 million), as against INR 12,787 million (US$ 156 million) in Q4 FY22," ReNew said in the statement and added, “Adjusted EBITDA(2) for FY23 was INR 62,004 million (US$ 754 million), an increase of 12.4% over FY22."
The company, one of India’s largest clean energy firms, plans a capital expenditure of ₹35,000 crore and recently raised $400 million by selling senior-secured green bonds. ReNew has a total portfolio of 13.7 GW, of around 8GW is operational. As part of its growth strategy, the firm founded by Sumant Sinha has joined hands with AES and Siemens-backed Fluence to form an equal venture for the energy storage business in India. ReNew has also partnered with state-run Indian Oil Corp. Ltd and Larsen and Toubro to form a tripartite venture for the green hydrogen sector in India. ReNew also plans to build a green hydrogen manufacturing facility in Egypt’s Suez Canal Economic Zone. ReNew has also announced its plans to invest ₹1 trillion in total in both Maharashtra and Karnataka in green energy projects.