ReNew-Norfund sign second joint investment in the transmission sector
ReNew (“ReNew”, RNW, RNWWW: NASDAQ) has commissioned its first interstate transmission project, the “Koppal Transmission Scheme” with the support of Norwegian Government’s Investment Fund.
The project was executed in a compressed time schedule and will help in transmission of 1,500 MW of renewable energy in the Koppal Area of Karnataka.
The Koppal Transmission Scheme was awarded in FY22 and covers construction of a new 400/220 kV Sub-station at Koppal along with 276 Ckt Km of 400 kV D/C quad moose transmission line with extension of the 400 kV GIS Bays at the PGCIL Narendra (New) Substation. Following the commissioning of the 1,500 MW Koppal Transmission Scheme, the remaining transmission for 3,500 MW is expected to be completed by June 2024.
ReNew has also signed an agreement on 15 Nov 2023 for the second joint investment in the transmission sector with Norfund, the Norwegian Government’s Investment Fund for developing countries., and KLP, Norway’s largest pension company, through their joint company KNI India AS. Norfund’s share is from Norway’s newly established Climate Investment Fund, managed by Norfund.
This marks Norfund’s and the Climate Investment Fund’s ongoing support in the transmission sector, helping to accelerate the transition to renewable energy.
The investment by Norfund and KLP in ReNew’s transmission projects is in line with ReNew’s farm-down strategy, enabling ReNew to add further capacity. In addition, synergies in project execution and operations with ReNew’s inhouse capabilities and the role of these projects in enabling earlier commissioning of renewable energy projects, will enhance returns and derisk completion timelines for ReNew’s core RE development business.
ReNew has won 3 transmission projects in Karnataka to date under ISTS. ReNew’s transmission projects are part of the ISTS for transmission of 5 GW of wind and solar power potential identified in Karnataka under Phase-I for implementation and interconnection with ISTS grid, for a period of 35 years.
Central Transmission Utility (CTU), an Indian Government-owned entity and a wholly owned subsidiary of PGCIL, will be responsible for billing, collection & disbursement of the revenue for these transmission projects.
India made commitments at the Glasgow COP26 summit to reach 500 GW of non-fossil fuel-based installed capacity by 2030, and to source 50% of all its energy from renewables by then.
The agreement to invest in the Gadag Project for a 49% stake is the second investment in the partnership, with an ambition for further joint investments. The expected levelized EBITDA for the project is ~US$6.2 million.
The project consists of (a) 2 x 500 MVA 400/220 kV sub-station at Gadag with 400 kV D/C transmission line from Gadag substation to Narendra New substation and 400 kV GIS Extn at Narendra New in Karnataka and (b) 3 x 500 MVA 400/220 kV Augmentation at Gadag Substation with 400 kV D/C transmission line from Gadag substation to Koppal substation and 400 kV AIS bays Extn at Koppal & Gadag end. These projects are to start in commercial operations in two phases – in the last quarter of FY24 and first quarter of FY25.
Speaking about this partnership with Norfund and KLP, Mr. Kailash Vaswani, Group CFO of ReNew Private Limited, said, “Investments in the transmission sector provide synergies with our core RE portfolio by enhancing certainty of connecting ReNew’s large RE development projects and demonstrates our success in capital recycling through which we have raised over half a billion of US dollars in equity over the past 2 years by selling stakes in assets.
“We are proud to partner with Norfund and KLP to support India’s green energy transition and look forward to strengthening this partnership in the future.”
Anne Beathe Tvinnereim, Norway’s Minister of International Development, said, “To secure the necessary investments for the vital energy transition, public funding must mobilise private capital.
“The signing between the Climate Investment Fund, ReNew and KLP is a great example of this. It also shows how Norwegian investments are helping India reach its goals of installing 500 GW of non-fossil capacity by 2030.”
Bjørnar Baugerud, head of the Climate Investment Fund at Norfund, said, “Strengthening the transmission infrastructure is critical to facilitate the dispatch of the necessary new renewable energy capacity to reach the climate goals in line with the plans of the Indian Government.
“Through this second investment and our partnership with ReNew, we are pleased to be able to contribute to the connection of another 2.5 GW of planned renewable power to the national grid.” Fiinews.com
