Edelweiss front runner to buy O2 Power’s 350 MW solar projects

The deal is likely to have an equity and enterprise value of $50 million and $200 million, respectively, the people said. The sale process is being run by EY.

Mint had earlier reported that Edelweiss, Actis Llp, and Gentari Sdn Bhd—a unit of Malaysia’s state-run oil and gas company Petronas--were shortlisted from a dozen non-binding offers (NBOs) that were submitted.

O2 Power is a renewable energy platform in India promoted by Singapore’s Temasek (with 49% stake) and European alternative asset manager EQT (51%). Founded by former ReNew Power executives Parag Sharma, Peeyush Mohit, Rakesh Garg and Nimish Agrwal, O2 Power is targeting a portfolio of around 5 GW and has already created a 4-GW portfolio. EQT and Temasek have invested $500 million in the company.

Edelweiss Infrastructure Yield Plus, the alternative investment fund managed by Edelweiss Alternatives, invests in operating assets across sectors, including roads, renewables and transmission. It has been active in the green energy space, and in 2021 acquired 74% stake in the solar portfolio of the Engie Group in India with 813 MW of operating capacity.

The spokespersons of Edelweiss Alternatives, EY and Actis Llp declined comment. Queries emailed to the spokespersons of O2 Power and Gentari Sdn Bhd remained unanswered till press time.

Edelweiss Infrastructure Yield Plus is also interested in Macquarie Group’s sale of 400 MW solar power projects of its Stride platform with the potential deal having an equity value of around $300 million, according to a 28 December Mint report.

This 350-MW sale transaction comes in the backdrop of EQT and Temasek’s plan to sell O2 Power. An earlier report by The Economic Times said they have appointed Barclays for the sale process, with the deal expected to have an equity value of around $1 billion.

A Barclays spokesperson declined comment on the investment bank being appointed for running the sale process of O2 Power. An EQT spokesperson also declined comment. A Temasek spokesperson said in an emailed response, “As a matter of policy, Temasek does not comment on market speculation and rumours."

Attracted by India’s green energy transition trajectory, several green energy deals are in play as reported by Mint. NASDAQ-listed ReNew Energy Global Plc is in talks with Singapore’s Sembcorp Industries Ltd to sell solar energy projects totalling 350 MW, with the deal estimated to be valued at around $241 million at the enterprise level and around $121 million in terms of equity.

Also, Rahul Munjal-led Hero Future Energies Pvt. Ltd is looking to hire JP Morgan for a pre-initial public offering (IPO) fundraising. The deal is also expected to have an equity value of around $200 million.

In addition, Gentari Sdn Bhd emerged as the winning bidder for Fortum Oyj’s Indian solar projects totalling 185 MW, in a deal having an enterprise value of around $200 million.

India has an installed renewable energy capacity of 180.79 GW, which includes 73.31 GW solar and 44.73 GW of wind power capacity.

India's power demand has been clocking record highs in the summers and is expected to set yet another new record of 260 GW in the coming summer. This is attracting investors, with the country getting $6.13 billion foreign direct investment in the renewable energy sector from April 2020 till September 2023, according to the Department for Promotion of Industry and Internal Trade (DPIIT).