Smart Energy Finances: Norse investors buy 49% stake in Indian transmission scheme

This week’s Smart Energy Finances looks at a consortium of Norwegian investors acquiring a 49% stake in an Indian transmission scheme to help scale private capital.

Also on the radar are the closing of Gridmatics’ storage fund, Siemens’ financial safety net and the sale of a 410MW battery storage pipeline.

Norse investment in Indian transmission

The Norwegian Climate Investment Fund, managed by government-owned Norfund and KLP, Norway’s largest pension company, is investing approximately $9 million for a 49% stake in the Koppal Transmission Scheme.

The project is being led by Indian decarbonisation solutions company ReNew, marking their first interstate transmission project to help transmit renewable energy in the Koppal Area of Karnataka, India.

The Indian scheme was awarded in fiscal year 2022 and covers the construction of a new 400/220kV substation at Koppal along with 144km of 400kV direct current transmission line with extension of the 40kV GIS Bays at the PGCIL (Power Grid Corporation of India Ltd) Narendra substation.

ReNew said the investment aligns with their ‘farm-down strategy’, whereby developers sell stakes in renewable assets to institutional investors looking for long-term and stable yields, to add further renewable capacity to the grid.

In addition, synergies in project execution and operations with ReNew’s in-house capabilities are hoped to enhance returns and derisk completion timelines for ReNew’s core renewable energy development business.

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Through the partnership, every rupee invested by Norfund will equate to 15 rupees mobilised from private capital, said Norfund in a release.

Commented Anne Beathe Tvinnereim, Norway’s minister of international development: “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 500GW of non-fossil capacity by 2030.”

ReNew has won three transmission projects in Karnataka to date. Central Transmission Utility (CTU), a state-owned entity and a wholly-owned subsidiary of PGCIL, will be responsible for billing, collection and disbursement of revenues for the projects.

Following the commissioning of the 1,500MW Koppal Scheme, the remaining transmission for 3,500MW (ReNew has commited to build transmission for approximately 5GW in renewable energy) is expected to be completed by June 2024.

Funding update: Gridmatic’s second closing

Gridmatic, an AI-enabled power marketer, has announced the second closing of its first energy storage fund, bringing capital commitments to $50 million.

The storage fund opened earlier this year in August, aiming to allow the Californian energy supplier to establish multi-year offtake contracts with asset owners to operate energy storage using its AI algorithms.

The fund is earmarked to oversee the management of up to 500MW of battery capacity in the ERCOT (Electric Reliability Council of Texas) and CAISO (California Independent System Operator) markets.

ERCOT and CAISO run the Texan and Californian grids respectively, remaining the two strongest US energy markets with pipelines of 32GW and 43.7GW in planned project capacity.

“Successfully closing our energy storage fund now allows us to accelerate our growth in signing offtake agreements with asset owners and developers,” said David Miller, vice president of business development for Gridmatic.

“This summer showed us the major potential for battery storage in California and Texas to contribute to grid resiliency efforts. Our fund will help maximize these opportunities for batteries to play a greater role in the grid and for the market to grow.”

Also from Smart Energy Finances:
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ICYMI: Siemens Energy’s safety net and Indian decoupling

Germany’s Federal government is stepping in to offer a ‘safety net’ to Siemens Energy as the company reported a net loss of €4.5 billion ($5 billion) for the 2023 fiscal year and an order backlog of €112 billion ($121.6 billion).

Siemens Energy will receive a €12 billion ($13 billion) guarantee line from a banking consortium, with Berlin’s €7.5 billion ($8 billion) counter guarantee provided to the banks in order to ensure the guarantee line is successful.

Officially announced during the company’s Q4 media briefing, the financing was agreed upon to re-insure the tech company.

“The demand for our technologies and products is huge,” said Siemens Energy chief executive Christian Bruch. “It is industry practice to offer guarantees to ensure potential customer requirements are met.

“It is not a loan.” He added: “It is important to be able to cover our huge incoming orders, in particular the wind area.”

Announced at the same time as the safety net, and as part of measures to support the stability of Siemens Energy, Siemens – which still holds a 25% stake in Siemens Energy – also announced its intentions to acquire an 18% stake in Siemens Ltd India from Siemens Energy for a cash price of €2.1 billion ($2.3 billion).

The purchase will be done via a share purchase agreement with Siemens Energy, increasing Siemens’ stake in the publicly listed company from 51% to 69%, with Siemens Energy’s stake decreasing from 24% to 6%.

Read the full story covered on Power Engineering International

Emeren sells 410MW battery storage portfolio

Emeren Group Ltd, a solar project developer, has sold a portfolio of five Battery Energy Storage Systems (BESS) in Italy to Matrix Renewables, an energy platform created and backed by alternative asset manager TPG and its $16 billion impact-investing platform TPG Rise.

Emeren called the transaction a significant milestone within the framework of a Development Service Agreement (DSA) the two executed in June, which outlines the development of a 1.5GW BESS portfolio.

The five projects feature standalone storage systems, with a cumulative capacity of 3,787MWh.

The entire portfolio is strategically located in the Italian southern region of Apulia, significantly enhancing the regional energy infrastructure. Ready-to-build status is expected to be achieved by late 2024.

Chris Matthews, managing director for Europe at Matrix Renewables, commented in a release, “Our partnership with Emeren underscores our commitment to driving renewable energy expansion and sustainability in the vibrant Italian market.

“The acquisition of the 410MW BESS portfolio significantly advances our mission to reshape the energy landscape and fortify the resilience of the power grid.”

Emeren has a pipeline of projects and IPP (independent power producer) assets totalling over 3GW, as well as a storage pipeline of over 6GWh across Europe, North America and Asia. The company focuses on solar power project development, construction management and project financing services.

Matrix Renewables’ current portfolio is comprised of 11.7GW in renewable energy and storage projects in Europe, North America and Latin America.

For the latest finance and investment news coming out of the energy sector, make sure to follow Smart Energy Finances Weekly.

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Yusuf Latief
Content Producer
Smart Energy International

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