The deal is expected to enable Adani Green Energy to achieve its target renewable portfolio of 25 GW, four years ahead of the timeline.
Adani Green Energy will acquire 5 GW of renewable power portfolio from SB Energy India for a fully-completed enterprise evaluation (EV) of $3.5 billion (approx Rs 26,000 crore), the company announced in an official statement.
The share purchase agreement was signed on May 19 for acquisition of 100 percent interest in SB Energy from SoftBank Group and Bharti Group, who held 80 percent and 20 percent stake, respectively.
In recent times, this is the fourth successive deal struck in the solar segment by Adani Green Energy whose stock has surged by almost 13 percent in the last one month. On April 19, it was trading at Rs 1055. On May 18, it traded around Rs 1199.
The stock was up 5 percent intraday at the time of publishing this article on the back of the deal announcement.
Earlier, it acquired the domestic assets of Sterling and Wilson and Toronto-based SkyPower Global. It has also sold a 20 percent stake to France's Total.
The India government has an ambitious target to achieve 175GW of renewable capacity, including 100GW of solar power by 2022.
SB Energy has a total renewable portfolio of 4,954 MW in four states. This is the largest acquisition in India's renewable space.
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Adani Group Chairman Gautam Adani called this acquisition “another step” in their vision to become the world’s largest solar player by 2025 and the largest renewable company by 2030.
“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 (and set up adjacent platforms for hydrogen and storage). We are well on our way to achieve our stated solar portfolio targets four years before the deadline we set for ourselves. The quality of assets that SoftBank and the Bharti Group have built are excellent and I compliment their efforts to support India’s renewable energy transition. We are proud to take their legacy forward,” he added.
The deal is expected to enable Adani Green Energy to achieve its target renewable portfolio of 25 GW, four years ahead of the timeline and takes the company’s present total renewable capacity to 24.3 GW and operating renewable capacity of 4.9 GW.
The portfolio consists of large scale utility assets where 84 percent or 4,180 MW is solar capacity (1,400 MW operational capacity and 3,554 MW under construction), 9 percent or 450 MW is wind-solar hybrid capacity and 7 percent or 324 MW is wind capacity.
“This acquisition demonstrates Adani Green Energy’s intent to be the leader in sustainable energy transition globally and makes it one of the largest renewable energy platforms in the world. The closing of the transaction is subject to customary approvals and conditions,” a statement from the company read.
All projects in the acquisition have 25 year power purchase agreements (PPAs) with state-run companies such as Solar Energy Corporation of India (SECI), NTPC and NHPC.
Masayoshi Son, Representative Director, Corporate Officer, Chairman & CEO of SoftBank Group Corporation in his statement said SB Energy India was established in 2015 to create a “market leading clean energy company” and added that the deal with Adani Green Energy will help “drive the next phase of growth”.
He added that SB Group is continually transitioning to a “global investment holding company focused on accelerating the deployment of artificial intelligence”.
Adani Green Energy is a part of India's Adani Group and has one of the largest global renewable portfolios with 19.3 GW of operating, under-construction and awarded projects, and locked-in growth projects catering to investment-grade counterparties. The company develops, builds, owns, operates and maintains utility-scale grid-connected solar and wind farm projects.