GKO.L Regulatory News (GKO)

4 February 2014

Greenko Group plc

("Greenko" or "the Company")

70 MW Hydropower Acquisition

Greenko, the Indian developer, owner and operator of clean energy projects, is pleased to announce it has agreed to acquire the Budhil 70 MW run-of-river hydropower plant in the Chamba district of Himachal Pradesh, near Greenko's existing assets. This will bring Greenko's total operating hydropower portfolio to 245 MW and its total generating portfolio to 546 MW - a 77% increase in total capacity since the start of the current financial year.

Greenko is acquiring Budhil from Lanco Hydro. The total value of the acquired assets is approximately €77 million, funded in-line with the Company's current portfolio from project finance debt and internal resources. The plant is fully built and is completing its stabilisation phase, with power sold through an open market PPA. On average the project is expected to have a plant load factor (PLF) of 57% and deliver an average of approximately €14 million of EBITDA over the long term, based on current exchange rates. Once final pro-forma approvals are received from the State and the banks, Greenko expects to recognise revenue from Budhil at the start of its 2014-15 financial year.

Following the acquisition, Greenko will have 12 run-of-river hydropower projects operating in its Himachal Pradesh cluster, totalling 141 MW. As a whole, these projects have a strong hydrology profile due to their position at the base of the Himalayan Mountains, with diverse water catchment sources including snow melt, rainfall and glacier melt. In a normal hydrology year, the total Himachal portfolio should have a PLF of over 60%.

Greenko also has outline agreement to acquire two additional projects, IKU-2 (5 MW) and Baner-3 (5 MW) in the Kangra district of Himachal Pradesh, from Lanco Hydro. This transaction is expected to complete later this year and further details will be announced at that time.

A further four wind farms, totalling 151 MW, are expected to be commissioned by the start of 2014's main generating season, which begins with the monsoon in July. Greenko's total portfolio of 2,000 MW is in advanced development and the Company remains on track to have the first 1,000 MW operational during 2015.

Commenting on the acquisition, Anil Chalamalasetty, CEO of Greenko, said: "This is an attractive deal for our shareholders, as it is immediately earnings accretive and offers strong returns. This acquisition, combined with the wind farms we expect to commission in the coming months, will take us to over 700 MW by the start of the 2014 monsoon, compared to 244 MW a year before. Our strategy is focussed on creating a diversified hydropower and wind portfolio for India's high demand power market, supported by strong execution and the reliable roll-out of high yield assets to accelerate the growth in shareholder value."

-Ends-

For further information please visit www.greenkogroup.com or call:

Greenko Group plc

Anil Chalamalasetty / Mahesh Kolli +44 (0)20 7920 3150

Vasudeva Rao Kaipa / Mark Thompson

Arden Partners plc

Richard Day / Adrian Trimmings +44 (0)20 7614 5917

Investec Bank plc

Jeremy Ellis / Gary Clarence +44 (0)20 7597 4000

Tavistock Communications

Matt Ridsdale / Mike Bartlett +44 (0)20 7920 3150

About Greenko

Greenko is a mainstream participant in the growing Indian energy industry and a market leading owner and operator of clean energy projects in India utilising a de-risked portfolio of wind, run-of-river hydropower, natural gas and biomass assets. The Group is now focused on building new utility scale wind farms and hydropower projects across India. Greenko intends to increase the installed capacity it operates by winning concessions to develop and build new greenfield assets, as well as making selective acquisitions which enhance shareholder value.

Greenko's portfolio is carefully planned and managed to ensure it offers investors diversification and spreads its risk across a number of projects that utilise various well-proven environmental technologies. The Company's goal is to reach 1,000 MW of operational capacity in 2015 and approximately 2,000 MW in 2018.

With a core belief in sustainability both operationally and environmentally, Greenko endeavours to be a responsible business playing an important role in the community beyond its role in the power generation industry. The Company maintains a continuous involvement in localised projects and community programmes which centre on education, health and wellbeing, environmental stewardship and improving rural infrastructure.

Greenko Group plc was admitted to trading on the AIM market of the London Stock Exchange (LSE: GKO) in November 2007. 

About Lanco Hydro

Lanco Hydro is a wholly owned subsidiary of Lanco Infratech Ltd, one of India's leading private sector power developers. Lanco Infratech has approximately 4.7 GW of mainly coal-fired operational capacity, 4.6 GW under construction and 6.8 GW under development. Lanco employs over 6,400 people and is headquartered in Gurgaon, close to New Delhi.