Greenko Group looking to acquire Essel Infraprojects for $1 billion

The Greenko Group, a Hyderabad-based renewable energy company, is in talks with Essel Infraprojects for buying its power transmission business at an estimated USD 1 billion, according to a Mint report.

The report, citing sources, said that this will be one of the largest deals in the Indian electricity transmission area.

Mahesh Kolli, Greenko’s founder, president and joint managing director, did mention of the firm's interest in acquiring the power transmission assets but refused to divulge details.

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“It is part of Greenko’s strategy to invest in transmission and distribution assets,” Kolli said.

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The Greenko Group is backed by Singapore’s sovereign wealth fund GIC Holdings Pte and the Abu Dhabi Investment Authority.

Projects related to transmission in the renewable energy space are considered to be a safer investment due to the annuity aspect and the restriction of risks concerning right of way, forest clearance and land acquisition are kept to the construction stage.

Annuity projects offer a fixed return, making them safer bets.

The players in the renewable energy sector are hopeful that the demand for electricity will get stoked by the Rs16,320 crore Saubhagya scheme — aimed at providing electricity connections to over 40 million families in rural and urban areas by December 2018.

Essel Group has a presence across green energy, transportation, electricity transmission and distribution, and urban infrastructure. Greenko Group currently has over 3.2 gigawatts (GW) of operating capacity, with plans to reach.

It last acquired SunEdison’s Indian assets at an enterprise value of USD 392 million in 2016 as it aims to achieve an operating capacity of 5GW by 2019 .

Essel Infraprojects also plans to sell its solar business and has mandated Investec to find a buyer, as per another Mint report.

Wind power tariffs plummeted to Rs 2.43 per kilowatt-hour at (kWh) at the Gujarat Urja Vikas Nigam Limted auctions last month.

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