JSW Energy Ramps Up Green Portfolio With 4.69 GW Buy From O2 Power

JSW Energy has announced that it has entered an agreement to acquire a 4,696 megawatt (MW) renewable energy platform from O2 Power Pooling Pte Ltd for Rs 12,468 crore (approximately USD 1.47 billion).

O2 Power is a joint venture between EQT Infrastructure and Singapore’s sovereign wealth fund Temasek, founded by ex ReNew Power employees, Parag Sharma, Peeyush Mohit and Rakesh Garg in 2020.  It has assets of close to 4.9 GW operational and under development.

The assets going to JSW Energy include 2,259 MW of operational capacity expected to be online by June 2025, 1,463 MW currently under construction, and an additional 974 MW in the pipeline, all scheduled for commissioning by June 2027. The final deal value is expected to be closer to Rs 26,000 crores, if one takes ito consideration the costs involved in completing the capacity under construction, and net of working capital needs.

The deal is expected to close by May 26, subject to approval from the Competition Commission of India and other customary regulatory clearances.

The acquisition will up JSW Energy’s locked-in generation capacity by 23 per cent, from 20,012 MW to 24,708 MW. It will also support JSW’s stated mission to achieve 20 GW generation capacity by 2030.

Parag Sharma, CEO of O2 Power had this to say about the deal- “This marks the beginning of the next phase for O2 Power. We had started with the vision to build a RE platform with a strong portfolio, and have been successful in delivering the targets we had set out with. In the process, we built an exceptional team with strong execution capabilities, and became one of the fastest growing renewable energy companies in the country within a short time.”

According to brokerage Motilal Oswal, with listed renewable energy companies currently trading at 15 times Enterprise Value to EBITDA, the acquisition of 4.7 GW of high-quality renewable assets at 7 times EV / EBITDA, will unlock value of up to ₹57 per share for JSW Energy.

JSW Energy is also present in five out of the seven states where O2 Power operates and Motilal Oswal believes that this provides significant synergy potential, leading to cost optimisation in the Operations & Maintenance business.

Sharad Mahendra, Joint Managing Director and CEO of JSW Energy, stated, “This landmark acquisition strengthens our positioning as a leading player in India’s energy sector. These high-quality assets strengthen our operational footprint across key resource-rich states.”

Pritesh Vinay, Director (Finance) and CFO of JSW Energy, added, “This is a very attractive acquisition – both from ‘build vs buy’ trade-off as well as from a quality and value perspective when compared to all acquisitions in this space over recent times, and is consistent with our long track record of being prudent in capital allocation and focusing on high cash returns projects above our hurdle rate of mid-teen equity IRR.”