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ORIX to invest $980 million to acquire a significant minority stake in Greenko

ORIX Corporation has entered into an agreement to make an investment of at least $980 million to acquire shares in Greenko Energy Holdings (Greenko) through a combination of primary and secondary transactions, valuing Greenko equity at about $5.75 billion.

Final investment amount and resultant shareholdings are subject to closing adjustments, including exchange rate fluctuations. The investment further solidifies the company’s shareholder base, comprising long-term investors such as GIC and ADIA, and strengthens its position as a global leader in the provision of long-term, least-cost renewable energy. In addition, ORIX’s 873-MW of operating wind assets in India will be acquired by Greenko and will be subject to customary regulatory approvals and certain conditions.

Operational capacity

This will increase Greenko’s overall operational capacity to about 6.5 gigawatts (GW). The total includes the recently announced acquisition of a 1.2-GW hydro asset and adds to Greenko’s growing, well diversified and de-risked portfolio of wind, solar and hydro assets. Greenko has additional under-construction capacity of over 8 GW, largely from its Integrated Renewable Energy Projects (IREP) which began construction earlier this year. IREP will take Greenko’s total operating capacity to about 14.5 GW once completed, confirming its leadership position in the Indian new energy Sector. The acquisition of ORIX’s wind assets will add approximately $100 million to Greenko’s EBITDA in the first full year after close.

Greenko believes the combination of its existing hydro, solar and wind projects, with a strategy of 24/7 Schedulable Renewable Power On-Demand (SPOD) and renewable power supply during peak hours to help power distribution companies is the right next step in its growth trajectory. Greenko has received permits to build and operate multiple Integrated Energy Storage Projects across five States in India with an overall daily and seasonal storage capacity of ~40 GwH. Greenko’s Intelligent Energy Platform aims to deliver the lowest cost and reliable energy models to overcome the challenges posed by fast growing renewables to grids and utilities, enabling acceleration of India’s decarbonisation goals to 50 per cent of energy by 2030.

Energy markets

“We welcome ORIX as a long-term partner. The transaction will further drive capacity, revenue, EBITDA and overall earnings growth for Greenko and our stakeholders. Indian energy markets are transitioning from deficit markets to demand-driven contracts requiring reliable, flexible and cost-competitive energy. Greenko is focused on building IREP with storage, which can compete with conventional energy assets like thermal in quality, quantity and cost.” said Anil Chalamalasetty, Managing Director and Chief Executive Officer, Greenko.

“We are excited to partner with Greenko through this investment, which represents a very important step for us in accelerating our corporate strategy of contributing to build a sustainable society” said Hidetake Takahashi, Head of Energy and Eco Services Business Headquarters of ORIX. “Greenko is a leading renewable platform in India which has become one of the largest renewable markets in the world. We are very impressed by Greenko’s competitive and differentiated strategy to provide renewable energy as clean, reliable and flexible power. We are looking forward to working alongside the company’s existing shareholders and its world-class leadership team and founders to create a more sustainable future. Integrating our wind portfolio into Greenko and becoming a substantial minority shareholder supports the company’s growth strategy.”

ORIX Corporation is a global powerhouse established in 1964. ORIX, at present, operates a diverse portfolio of businesses in the operations, financial services, and investment spaces.

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