GE Energy Financial Services is investing USD 50 million in the wind energy business of renewable energy company Greenko, endorsing the strategy of the AIMS-listed company and expand the entry point for GE to enter the wind farm business in India.
Greenko, a Euro 44 million company, is building a de-risked portfolio of wind, hydro electric, natural gas and biomass assets in India. The company will hive off the wind business into a wind holding company,Greenko Wind Project, to be a subsidiary of the main company. Earlier this year, Greenko raised USD 80 million from its existing shareholders to grow the wind business.
Greenko has plans to expand its wind energy business to initially 500 MW, and then to 1000 MW over the next few years, and is developing wind farms across AP, Maharashtra and other states. GE Energy Financial Services, a subsidiary of GE, is investing in two tranches of US$25 million for equity shares and US$25 million for convertible preference shares in GWPP, with an option to participate in case of any IPO the company may make.
The investment would eventually lead to a minority stake, estimated by analysts at about 12.5% for GE. Greenko already has a strategic partnership with GE, for technology and development of wind farms. GE Energy Financial Services’ has a US$6 billion portfolio of renewable energy investments worldwide.
According to Mahesh Kolli, president and joint managing director of Greenko, this investment is an endorsement of Greenko’s unique wind strategy of following a long term disciplined approach. The company is developing its own portfolio of wind farms, and using global technology including GE’s wind turbines, to build its wind assets. “Unlike the usual practice of picking up the keys to a farm from a turnkey builder, we have first collected data, and are then building our own,” said Mahesh Kolli.
“This is a great independent endorsement for Greenko; it adds significant value and maximizes the use of investors’ cash,” Religare Capital Markets, UK, said in a research note. Greenko has announced that it intends to raise further financing from similar partners in future. The company currently has an operational capacity of 182.6 MW, split between hydro, biomass and gas/liquid fuel, making it one of the leading renewable energy providers in the market. The company listed on AIMs in 2007, and in April 2011 had an EBITDA of 25.2 million.
