Diversified business house Adani Group's renewable energy arm, Adani Green Energy Limited (AGEL) will acquire close to 5 GW (4,954 MW precisely) renewable energy portfolio of SB Energy India for an enterprise value of approximately $3.5 billion, which it terms as the 'largest' acquisition in the renewable energy sector in India.
SB Energy India's portfolio comprises 4.18 GW of solar with 84% share out of which 1.4 GW is operational and another 3.554 GW is under construction. A total of 9% of the portfolio includes wind-solar hybrid capacity of 450 MW, and 7% or 324 MW of wind capacity.
All the projects are contracted under 25-year power purchase agreements (PPA) with sovereign rated counterparties as the Solar Energy Corporation of India Ltd. (SECI), NTPC Limited and NHPC Limited. With this acquisition AGEL now has a total renewable capacity of 24.3 GW and operational capacity of 4.9 GW.
AGEL said the 'transformational acquisition' of SB Energy India will enable the company to achieve its renewable portfolio of 25 GW, 4 years ahead of the target timeline.
"The renewable energy platform that we are building will lay the foundation for attracting several other global industries that are increasingly looking to reduce their carbon footprint (as well as lay the foundation for opening up adjacent platforms that include Hydrogen and Storage)," said Adani Group's Chairman Gautam Adani. "We are well on our way to achieve our stated solar portfolio targets four years before the deadline we set for ourselves."
A Reuters report pointed at the way Adani has been scaling up fast in sectors beyond solar as well, right from cargo processing, transmission, city gas distribution and airports, especially since 2014 when Narendra Modi became the country's Prime Minister. In the space of renewable energy, Gautam Adani led Adani Group has expressed aim to become the world's largest solar player by 2025, and thereafter the world's largest renewable company by 2030.
"The Indian tycoon has a better chance of achieving his grand ambitions. He's seen as close to Prime Minister Narendra Modi, who commendably wants to quadruple Indian renewable energy capacity to 450 GW by 2030," reads the Reuters report.
Background
AGEL will acquire 100% stake in the company from its parents—Masayoshi Son's SoftBank Group (SBG) and India's Bharti Group that hold 80:20 share in SB Energy India. It was initially launched as a joint venture (JV) by the 2 companies along with Foxconn Technology Group of Taiwan with an aim to commission 20 GW solar power capacity for $20 billion investment. Plans included entering solar panel manufacturing in India at a later date.
Recently there were media reports stating that SBG was planning to sell off its controlling stake in SB Energy for $525 million to Canada Pension Plan Investment Board (CPPIB), but the deal was called off due to the latter placing some condition precedents (CP) which the former apparently did not agree with.
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