The acquisition is a part of Tata Power Renewable Energy, a renewable energy unit of Tata Power, effort to expand its clean energy portfolio to 2.3GW.

Tata Power said in a statement that the deal is "the largest transaction in renewables space in India".

Tata Power CEO and managing director Anil Sardana said: "The Company is pursuing growth in Renewable Energy space to create value for its shareholders through various organic and inorganic growth opportunities.

"Tata Power can further enhance value of these assets with its operational experience and financial optimization. The acquisition is also a significant step towards attaining the company’s objective of having non-fossil fuel based capacity up to 30-40% of its total generating capacity."

Welspun Renewables, a part of the $3bn Welspun Group, has 1,140MW of renewable energy assets in India. This includes about 990MW of solar projects and about 150MW of wind generation assets.

With the deal, the Welspun’s assets would complement Tata Power’s 294MW of renewable power capacity and about 400MW of solar and wind projects which are currently under construction.

The deal, which will be financed by Tata Power through a mix of bank loans and non-convertible bonds, also includes also Rs55bn ($819.7m) debt of Welspun Renewables Energy, reported The Times of India.

Welspun Energy has 88% stake in Welspun Renewables Energy while the remaining 12% stake is held by Asian Development Bank.

Additionally, GE Energy Financial Services and DEG, an unit of Germany owned development bank KfW, own equity convertible instruments in Welspun Renewables.

Tata Power plans to increase its total installed power generation capacity from current 9GW to 18GW by 2022 across thermal, renewable and hydropower while reducing dependence on fossil fuels.

The Indian Government has earlier announced its aim to have 100GW of installed solar power capacity and 60GW of wind power capacity by 2022.

Image: Tata Power Renewable Energy plans to expand its clean energy portfolio to 2.3GW. Photo: courtesy of Naypong/