The deal covers 10 wind SPVs with a generation capacity of 1.33GW and seven solar SPVs with 422MW of generation capacity in India
JSW Energy is set to acquire a portfolio of 1.75GW of renewable energy generation capacity in India from Mytrah Energy (India) for INR105.31bn ($1.32bn) in cash.
In this connection, JSW Neo Energy, a fully-owned subsidiary of JSW Energy, has signed the necessary definitive agreements with Mytrah Energy.
The deal follows an exclusivity agreement that was reportedly signed by the parties in May 2022.
The portfolio being acquired comprises 17 special purpose vehicles (SPVs) and one ancillary SPV. This further includes 10 wind SPVs with a generation capacity of 1.33GW and seven solar SPVs with a generation capacity of 422MW.
According to JSW Energy, the wind and solar assets involved in the deal are mainly located in the southern, western and central regions of India. The assets are backed by long-term power purchase agreements (PPAs) and have an average remaining life of nearly 18 years.
JSW Energy joint managing director and CEO Prashant Jain said: “This landmark deal demonstrates our strong commitment to achieve our vision of achieving 10 GW capacity by 2025 and being a leading player in India’s Energy Transition.
“This acquisition further strengthens and diversifies our operating footprint across various key resource rich states. We also believe that by leveraging our strong industry, operating and financing expertise, we would be able to significantly improve the operating performance of this entire portfolio, which will ultimately create tremendous value to our shareholders.”
The deal marks the largest acquisition for JSW Energy since it was founded, and will increase its current operational generation capacity of 4.78GW by more than 35% to 6.54GW.
With nearly 2.5GW of wind and hydro projects under construction and expected to be commissioned over the next 18-24 months, JSW Energy’s platform capacity will go up to 9.1GW.
JSW Energy finance director and CFO Pritesh Vinay said: “The acquisition of Mytrah’s portfolio by JSW Energy is significantly value accretive and consistent with our long track record of being prudent in capital allocation and focusing on high cash returns.
“This is a very attractive acquisition – both from ‘Build vs Buy’ trade off as well as relative value when compared to all acquisitions in this space in recent times.”
The deal, which is subject to approvals from the Competition Commission of India (CCI), lenders’ approval, and other preceding conditions, is expected to close by mid-November 2022.