O2 Power to buy stake in Hero Future Energies’ Rajasthan SPVO2 Power to buy stake in Hero Future Energies’ Rajasthan SPV

O2 Power, promoted by European alternative asset manager EQT and Temasek, is acquiring a 49% stake in Rahul Munjal-led Hero Future Energies Pvt. Ltd’s special purpose vehicle (SPV)–Clean Solar Power Bhainsada–that is setting up a 250 megawatt (MW) solar capacity in Rajasthan, said two people aware of the development.

The SPV won this project by quoting a tariff of Rs2.53 per unit and has a 25-year power purchase agreement (PPA) with state-run Solar Energy Corporation of India (SECI). An announcement is expected to be made shortly about this sale, that will help O2 Power reach a 1.23-gigawatt (GW) portfolio.

This sale is part of the transaction for which Hero Future Energies has mandated HSBC to sell 500 MW of pre-construction assets. With an installed capacity of 1.7 GW and an additional 1.5GW under construction, Hero Future Energies plans to build a 3.5GW operating portfolio by 2022.

Rahul Munjal, managing director, Hero Future Energies confirmed the development. In response to a direct query about the deal closure date, Munjal said it will be “shortly.”

“If we are going to sell, we will sell now. If we don’t sell now, we will continue to build them,” Munjal told Mint.

A O2 Power spokesperson declined comment.

O2 Power is a $500 million renewable energy platform in India that is targeting around 5 GW portfolio over the next five years. Founded by former ReNew Power executives—Parag Sharma, Peeyush Mohit, Rakesh Garg and Nimish Agrwal—O2 Power has already bagged a 1 GW portfolio.

“The investment will help O2 Power commission its first project in 2021,” said one of the two people cited above requesting anonymity.

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