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Goldman Sachs fund invests $135 million in India's ReNew Power

MUMBAI: Goldman Sachs has invested additional $135 million in ReNew Power, raising its total investment in the company to $385 million and making it the biggestprivate equity investment in India's renewable energy sector. 

ReNew Power, which was founded by Sumant Sinha who was earlier the chief operating officer of wind turbine major Suzlon Energy, has 200 mw of wind turbines in operation. It aims to scale up its capacity to 500 mw by end-2014 and 1,000 mw to 2015.

Confirming the development, Sinha said, "Goldman Sachs has long-term interest in renewable energy sector and has therefore invested another $135 million. With this investment, we have enough equity base to set up 1,200- 1,300 mw of capacity." In 2011, Goldman Sachs invested $200 million to acquire majority stake in ReNew Power. It later invested another $50 million. 

Sector experts said that ReNew Power has been in talks with other 
wind energy generators for acquisition of assets and the funds from Goldman Sachs may be used towards that. "We are looking at acquisition opportunities. We have the capital and we want to expand, it doesn't matter whether its organically or through the secondary market route," Sinha said. 

The renewable energy sector, led by wind energy, in India is seeing a rebound in investment with around six deals worth $650 million (including this deal) being sealed so far in 2013. In contrast, investors have been shying away from the conventional energy segment due to policy uncertainties, delay in projects and lack of fuel linkage. The wind energy sector has had its own share of uncertainties, with the government rolling back sops such as generation-based incentives (GBI) and accelerated depreciation (AD) in April 2012. GBI , which gives independent power producers monetary benefit on every unit generated, was reintroduced in the Union Budget this year but it is yet to be implemented. Renewable energy projects have also been hit by the near collapse of the Renewable Energy Certificate (REC) market. 

"Its been pretty tough for the sector due to the uncertainty around GBI and the collapse of the REC market. Valuation of projects are now different from what they used to be," Sinha said. India plans to double its renewable energy capacity to 55,000 MW by 2017.