Blackrock-led group to invest Rs 4,000 crore in Tata Power Renewables

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Tata Power Renewable Energy Limited has raised Rs 4,000 crore to create India's most comprehensive renewable energy platform.

The Tata Power Company Ltd and BlackRock Real Assets-led consortium, including Mubadala Investment Company (“Mubadala”), have entered into a binding agreement to invest in Tata Power’s renewable energy subsidiary, Tata Power Renewable Energy Limited, a company statement said on April 14.

"BlackRock Real Assets, together with Mubadala, shall invest Rs 4,000 crore (~US$ 525 million) by way of equity / compulsorily convertible instruments for a 10.53% stake in Tata Power Renewables, translating to a base equity valuation of Rs 34,000 crore. The final shareholding will range from 9.76% to 11.43% on final conversion", the statement read.

“The BlackRock Real Assets-led consortium is set to get one seat on the Tata Power Renewable Energy board,” a Tata Power executive has told Moneycontrol.

The platform will consist of five distinct businesses delivering long-term, customer-oriented solutions.

It will house all renewable energy businesses of Tata Power including those in Utility-Scale Solar, Wind & Hybrid Generation assets; Solar Cell & Module Manufacturing; Engineering, Procurement and Construction (EPC) contracting; Rooftop Solar infrastructure; Solar Pumps and Electric Vehicle Charging infrastructure.

The broad-based portfolio of assets ensures diversified yet stable revenue sources including 25-year fixed-price PPAs for grid-connected utility scale projects. The first round of capital infusion is expected to be completed by June 2022 and the balance funds will be infused by end of the year.

Tata Power CEO Praveer Sinha informed that all new renewable energy businesses will be done via Tata Power Renewable Energy and all renewable energy assets and businesses of Tata Power will be transferred to Tata Power Renewable Energy.

Sinha further informed that the BlackRock Real Assets-led consortium deal will take care of equity needs for the next two years for Tata Power Renewable Energy; beyond that, “we may look at more fundraising via equity for Tata Power Renewable Energy for new projects”, he said.

Dr Praveer Sinha, CEO and Managing Director, Tata Power Company Limited commented, "Tata Power Renewables is an industry leader with a broad and deep portfolio of next-generation renewables businesses well placed to scale up rapidly based on its strong and consistent performance over the years. I am delighted to welcome BlackRock Real Assets & Mubadala to join us to take the renewables business to the next level of growth. The collaboration will support us to pursue exciting
opportunities that lie ahead in the coming decades"

Anne Valentine Andrews, BlackRock’s Global Head of Real Assets resonating with the same thoughts added that India’s success in transitioning its
energy economy will be crucial to the world’s ability to meet its climate goals.

Over the next five years, Tata Power Renewables aims to achieve a portfolio of over 20 GW of renewables assets and a market-leading position in the rooftop and electric vehicle charging space across the country.