JSW Energy has just made a power play in the renewable sector, finalising the acquisition of a 4.7GW renewable energy platform from O2 Power. This isn’t just a deal; it’s a statement, a strategic move that could reshape the Indian energy landscape. The acquisition, valued at Rs124.68bn ($1.44bn), is JSW Energy’s largest to date, and it’s a bold step towards their 20GW capacity target.
The platform, established by EQT and Temasek in 2020, is a powerhouse in itself, with a diverse energy mix spread across seven resource-rich states, primarily in western India. It includes 1.8GW of solar, 0.5GW of wind, 1.6GW of hybrid, and 0.9GW of complex solutions like firm and dispatchable renewable energy. This isn’t just about capacity; it’s about capability. The platform has a blended average tariff of Rs3.37 per kilowatt hour, and 3.72GW is already secured under power purchase agreements (PPAs) with high-credit-quality off-takers.
JSW Energy’s joint managing director and CEO, Sharad Mahendra, is bullish about the acquisition. “This acquisition brings high-quality assets across resource-rich states, along with a management team and employees having a proven track record in planning and execution,” he stated. He’s not wrong. The platform includes 4.1GW of utility-scale renewable energy projects and 596MW of commercial and industrial capacity. It’s a ready-to-go operation, with an additional 974MW of capacity awaiting the signing of PPAs.
But here’s where it gets interesting. JSW Energy plans to generate a steady-state EBITDA of Rs15bn from 2.25GW capacity by June 2025. That’s impressive, but it’s just the beginning. With an additional capital expenditure of Rs135bn, they aim to achieve a capacity of 4.69GW by June 2027, resulting in an annualised EBITDA of Rs37.5bn. That’s a significant jump, and it’s a clear indication of JSW Energy’s ambition in the renewable sector.
This acquisition isn’t just about expanding capacity; it’s about strengthening operational capabilities and presence. JSW Energy’s director of finance and chief financial officer, Pritesh Vinay, highlighted this, stating, “Not only is this acquisition attractive – both from a ‘build versus buy’ trade-off as well as from a quality and value perspective – but also we will draw synergies operationally as well as enhance portfolio returns from a competitive financing package to fund this transaction.”
But what does this mean for the sector? It’s a clear signal that renewable energy is not just the future; it’s the present. JSW Energy’s move could accelerate the shift towards renewables, challenging other players to up their game. It’s a bold move, and it’s set to spark debate and drive development in the sector. As of the fiscal year 2025, O2 Power’s installed capacity is 1.34GW. With this acquisition, JSW Energy’s pro forma installed capacity for the same period is 12.21GW, with renewable energy accounting for 6.55GW – approximately 54% of the total capacity.
And there’s more. JSW Energy has also received approval to acquire KSK Mahanadi Power Company’s 3.6GW coal-fired thermal power plant in Chhattisgarh. This acquisition is part of the company’s resolution plan under the corporate insolvency process. It’s a clear indication that JSW Energy is not just about renewables; they’re about a balanced energy mix.
This acquisition is a game-changer, and it’s set to shake up the sector. It’s a bold move, and it’s a clear signal of JSW Energy’s ambition. The energy sector is watching, and the debate is just beginning. How will other players respond? How will this acquisition shape the future of renewable energy in India? Only time will tell, but one thing is clear: JSW Energy is not just playing the game; they’re changing it.
