Private equity firms TPG, Tepco, Brookfield in talks for JSW Neo stake

JSW Energy had earlier announced that it would be shifting its hydro energy projects into subsidiaries under JSW Neo Energy

Private equity firms TPG, Brookfield and Tokyo Electric Power Company (Tepco) are discussing buying a minority stake in JSW Neo Energy, The Economic Times (ET) reported today. JSW Group hopes to raise up to $500 million from the stake sale, which the company is looking to use for further expansion in renewable energy.

Sources were quoted as saying that JSW Neo Energy may sign a deal with two of these funds in the coming weeks. JSW Neo Energy will also take the lead in the parent firm's upcoming renewable projects to produce green hydrogen.

Target 20 GW generation capacity by 2030

JSW Energy had earlier announced that it would shift its hydro energy projects into subsidiaries under JSW Neo Energy. This will aid the company in setting up a holding structure to facilitate fundraising.

 TPG, a US private equity fund, had earlier invested $1 billion in Tata Motors through its Rise Climate fund, Canada's Brookfield Asset Management is also making plans to expand its renewable energy portfolio in the country. Tepco has a stake in ReNew Power through Jera, a joint venture with Chubu Electric Power Co.

JSW Neo Energy took possession of 1.75 GW of renewable energy generation capacity from Mytrah Energy for Rs 10,530 crore. This includes a wind energy capacity of 1.33 GW and a solar energy capacity of 422 MW. The acquisition augmented the company's operational capacity by over 36 per cent from 4.81 GW to 6.56 GW. The listed company has a target of achieving 20 GW operational power generation capacity by 2030.

Previously, Prashant Jain, joint managing director of JSW Energy, stated in an interview that the firm was planning to take JSW Neo public.

On August 16, JSW Investments pared a 1.27 per cent stake in JSW Energy for Rs 717 crore through open market transactions. GQG Partners, Washington State Investment Board, AustralianSuper, Reliance Trust Institutional Retirement Trust Series Twelve, Witan Investment Trust Plc, and Alliance Trust Plc, among others, were the buyers of the shares of JSW Energy.