Indian company Larsen and Toubro (L&T) has signed an agreement to divest a 100% stake in the Singoli-Bhatwari hydroelectric project to ReNew Power Services, a wholly owned subsidiary of ReNew Power, for an Rs9.85bn ($132) consideration.

The 99MW run-of-the-river hydroelectric power plant is located in the Indian state of Uttarakhand.

It is owned by L&T Uttaranchal Hydropower (LTUHPL), a wholly-owned subsidiary of L&T.

ReNew Power founder, chairman and CEO Sumant Sinha said: “Given that the asset is already operational, the acquisition is not only value accretive for us but also presents a lower level of risk.

“It strengthens our ability to provide firm and round the clock power to the grid and complements our solar and wind assets, filling an important position in our portfolio.

“We will be looking to acquire more hydro assets in future as they are the best clean balancing sources for intermittent renewable energy.”

The plant is equipped with three units of Voith Turbine generators, each with 33MW of capacity. It also features a switchyard and is controlled via supervisory control and data acquisition (SCADA) technology.

The sale of the plant is said to be in line with L&T’s strategy, which focuses on selling non-core assets and improving shareholder value.

The deal is expected to close before 30 September subject to customary closing conditions.

L&T whole-time director D K Sen said: “This development is a significant step in our effort to unlock the value of some of our power development assets to streamline and allocate capital to create long term value for our shareholders.

“It represents our strategic effort to increase focus on our core strengths and exit others to move towards becoming a more asset-light organisation.”

In April, L&T was given a contract for a solar photovoltaic (PV) plant in Saudi Arabia via the renewable energy branch of its Power Transmission and Distribution business.

The contract for the 1.5GW Sudair project was awarded by Acwa Power and the Water and Electricity Holding Company.