standard Chartered hired to sell up to 49% stake for around $400 mn
New Delhi : Aditya Birla Group has hired Standard Chartered to sell up to 49% stake in the group’s renewable energy business to raise around $400 million, two people aware of the development said, as the conglomerate aims to bolster its position in India’s rapidly growing clear energy sector.
Aditya Birla Renewables aims to establish 4.5GW of installed renewable energy capacity by FY2026 through utility and commercial and industrial (C&I) projects, building upon its current project portfolio of 2GW, that comprises of existing and upcoming projects. With strong investor interest in the mature C&I segment, it offers insulation from risks such as power procurement cutailment by discoms. Open access allows large power users to buy power from the open market rather than relying on the more expensive grid.
In October 2015, Aditya Birla Group agreed to partner with Abraaj Group to build a large-scale renewable energy platform in India. However, the plan was shelved due to the Abraaj Group’s collapse.
A spokesperson for Standard Chartered declined to comment. Queries emailed to the spokesperson for Aditya Birla Group on 13 February remained unanswered.
“The renewable energy business is a potential growth engine for the Aditya Birla Group, and the plan is to grow it considerably,” said one of the two people cited above requesting anonymity. India’s green economy remains an attractive investment for global investors, despite the prevailing global economic headwinds. Amazon.com Inc. is one of the latest entrant in this space, procuring renewable energy to build a portfolio for sale on Indian electricity exchanges. With the world’s fourth-largest installed renewable energy capacity at 166GW, India has attracted $78.1 billion in investments for its renewable sector. Central Electricity Authority, India’s top power sector planning body, expects over half of the country’s 817GW power requirement by 2030 to be met through clean energy sources.
There are several green energy deals in play, as reported by Mint, including India’s largest pure-play solar platform, the ACME Group giving a formal mandate to Rothschild and Co. to raise $500 million equity by selling a stake in ACME Cleantech Solutions Pvt. Ltd. Ahmedabad-based Torrent Power Ltd is also in talks with ReNew Energy Global Plc to buy 1.1GW of its operational, clean energy capacity at an enterprise value of around $1.2 billion. Canada’s Alberta Investment Management Corp., Ontario Municipal Employees Retirement System (OMERS), Brookfield Asset Management Inc., and I Squared Capital are also looking to invest in Hyderabad-based renewable energy company Fourth Partner Energy Pvt. Ltd. In addition, Petronas, Sembcorp Industries, JSW Neo Energy, BP Plc, Norway’s state-run electricity firm Statkraft, and I Squared Capital is looking to acquire Continuum Green Energy (India) Pvt. Ltd at an enterprise value of $1.5 billion.
Investor interest in India’s clean energy sector is further boosted by surging demand for power and the Union government’s stance, as articulated by finance minister Nirmala Sitharaman during her budget speech. “India is moving forward firmly for the ‘panchamrit’ and net-zero carbon emission by 2070 to usher in green industrial and economic transition. This Budget builds on our focus on green growth,” she said on 1 February. India has set an ambitious target of achieving net-zero carbon emissions by 2070 while also reducing carbon intensity by 45% from 2005 levels. “We are implementing many programmes for green fuel, green energy, green farming, green mobility, green buildings, and green equipment, and policies for efficient use of energy across various economic sectors. These green growth efforts help in reducing the carbon intensity of the economy and provide for large-scale green job opportunities,” Sitharaman said in her speech.
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