Orient Green Power approves sale of biomass arm

India-based renewable power producer Orient Green Power (OGPL) has announced that it has approved the sale of its loss-making biomass operations to promoter firm Shriram Ventures (SVL).

According to media reports in the Business Standard, OGPL will get rid of that business at an enterprise value of INR 2.75 billion (€37m). The transaction will not include the 20MW cogeneration plant in Kolhapur, Maharashtra and a 10-MW plant in Rajasthan, which are being sold to third parties. Excluding these facilities, OGPL’s biomass portfolio totals 68 MW.

In a statement, the company said that the sale will accelerate the process of streamlining its operations and will reduce outstanding debt by around INR 2.5bn.

S. Venkatachalam, managing director of OGPL, said: “The sale of the biomass operation will enable us to unshackle the wind business which is poised to continue its strong performance of recent quarters. This will enable the significantly improved and profitable operational profile of the wind business to shine through.”

In fiscal 2016/17, the biomass operations experienced a 24% year-on-year drop in revenues to INR 780 million due to the shutdown of some of the plants, and booked a pre-tax loss of INR 810 million.

The sale is pending stockholder, creditor and regulatory clearance.