Mumbai: Adani Green Energy Ltd. said it has agreed to buy SoftBank Group Corp.'s renewable power business in India, as it seeks to accelerate efforts to expand capacity.
The firm, controlled by billionaire Gautam Adani, signed pacts for the acquisition of a 100 per cent interest in SB Energy India from SoftBank and partner Bharti Group, according to a statement. The transaction gives SB Energy an enterprise valuation of $3.5 billion, Adani said.
Adding the unit will help Adani Green meet a goal of having 25 gigawatts of renewable power capacity earlier than previously planned, as it targets a role as one of the world's largest suppliers of clean energy. The firm has been seeking acquisitions to bolster its roster of assets, after being faced with delays in starting some large projects.
SB Energy has a portfolio of almost 5 gigawatts of solar and wind assets in India, of which 1.4 gigawatts are currently operational, according to Adani's statement. All projects are backed by 25-year power purchase agreements with buyers. SoftBank holds an 80 per cent interest in SB Energy, with Bharti holding the remaining 20 per cent.
SoftBank pursued a deal with Adani after talks to sell its stake to Canada Pension Plan Investment Board fell through. The Japanese mobile phone and investment company founded by billionaire Masayoshi Son had said in 2015 it planned to invest $20 billion in the Indian renewables business along with partners.
The exit of SoftBank comes at a time when India has been courting foreign investors to fund its massive roll-out of clean energy. The world's third biggest emitter of greenhouse gases and one of the worst victims of air pollution plans to end its dependence on coal and expand renewable power capacity almost five times to 450 gigawatts.
French energy giant Total SE in January agreed to acquire a minority stake in Adani Green, as it also seeks to add global exposure to clean energy.
Indian government officials have been debating whether to set a goal to zero out the country's greenhouse gas emissions by mid-century, though Prime Minister Narendra Modi sidestepped making any specific new targets at a U.S.-hosted global summit last month.
"India, without any doubt, has been one of the few nations that has accelerated its global commitment towards climate change and we intend to do our part to execute on the promises made," Adani, chairman of Adani Group, said in the statement.
Adani Green shares advanced as much as 5 per cent on Wednesday following the announcement, extending the company's more than five-fold surge in the past year to a market value of about $27 billion.