Points to a new round of consolidation in the sector, which has drawn interest from private equity investors and top energy companies in recent years. The renewable energy company led by billionaire Gautam Adani said it would buy SB Energy Holdings for an enterprise value of $3.5 billion. Adani is buying SoftBank Group Capital’s 80% stake in SB Energy, and the remaining 20% held by Bharti Global in a cash deal. With the acquisition, Adani Green Energy will gain control of SB Energy Holding’s nearly 5 GW of renewable energy assets, including 1.4 GW of operational projects. The rest are under construction. SB Energy Holding’s green energy portfolio is 84% solar, 9% wind-solar hybrid and 7% wind projects. All come with 25-year power purchase agreements. Commenting on the deal, SoftBank said it is focused on stepping up its investments in artificial intelligence. While the Japanese company is virtually exiting the renewable energy business in India, Adani has indicated that it will accelerate its investments in this market.
The power assets bring Adani Energy closer to achieving its goal of owning 25 GW of renewable energy capacity by 2025. It currently has 19.3 GW of operating, under-construction, awarded and locked-in growth projects under its belt. Locked-in projects have a period during which they cannot be sold. Adani Energy is India’s largest green energy company, and its moves are key to India’s push to reach its goal of having 227 GW of renewable energy capacity by next year. The country currently has an installed capacity of 92.97 GW of renewable power, with an additional 50.15 GW in various stages of completion. India is the world’s No. 3 producer of renewable power, after the U.S. and China. Foreign direct investment in renewable energy in India totalled $9.83 billion between April 2000 and December 2020. Since 2014, total investment in the sector, including domestic spending, amounted to $42 billion. In recent years, the sector has seen greater interest from companies and private equity players, such as the Tata Group and U.S.-based Brookfield. India needs more project developers, with even greater balance sheet strength to tap this potential, while providing more scope for pension investors. The local infrastructure investment trust market is increasingly being seen as a key facilitator of this domestic-foreign capital interplay, opening up and enhancing the depth of the domestic Indian finance sector.