Government of Singapore Investment Corp to invest £100 mn in power firm Greenko

MUMBAI: The Government of Singapore Investment Corp (GIC), one of the world’s leading sovereign wealth funds, has agreed to invest £100 million in AIMlisted renewable energy company Greenko Plc for a minority stake.

This transaction, getting completed after a gap of over six months, will once again highlight the selective interests of global investors who are still willing to cherry pick bankable projects in an otherwise battered Indian power sector.

Hyderabad-headquartered Greenko along with its global subsidiaries develops owns and operates a portfolio of clean energy assets across Indian states. GIC’s investment will fast-track the construction of its wind farms and run-of-river hydro projects in Himachal Pradesh.

“The significant investment from GIC will take us beyond our 2015 operating capacity target of 1,000 MW and sets us up for our new target of approximately 2,000 MW in 2018. This shows great confidence in Greenko’s business model and its opportunity in the Indian power sector,” said the company’s chief executive Anil Chalamalasetty in a statement to the exchanges on Friday evening.

The money will first come into the Mauritian arm of Greenko Plc, Greenko Mauritius. The Greenko Mauritius shares will then convert into shares of the listed company at a price of 260 pence a share subject to final price adjustments in the next four years. Upon conversion, the investment will give GIC a 19.5% stake in Greenko on a fully diluted basis.

The promoters own 16% of the listed company, the rest is held by public and other investors that include marquee private equity names like TPG Capital and Standard Chartered Plc. Macquarie was the advisor in the transaction.

As on March 31, 2012, bulk of the power generated by Greenko is sold to Indian SEBs or under merchant power agreement thereby enhancing the financial viability of its projects.