A business meal has always held a significant place in dealmaking. It was one such dinner between Nara Lokesh, Andhra Pradesh's minister for information technology, and Sumant Sinha, founder and chairman, ReNew Power, in Davos early this year that scripted a comeback for the Gurugram-based green energy company, with a proposal to invest Rs 22,000 crore in the state. The groundbreaking ceremony to be held on May 16 will be among the top three largest renewable energy projects by installed capacity in Andhra Pradesh.
The state, rich in terms of renewable energy sources and potential as per studies by the Union government, currently has an installed clean energy capacity of just 9 gigawatts (GW). In comparison, neighbouring states such as Tamil Nadu and Karnataka have hit capacities of about 23 GW. The incumbent Andhra chief minister, N Chandrababu Naidu, has often blamed his predecessor YS Jagan Mohan Reddy for “taking the power sector backwards” in the state.
According to analysts, policy reviews in the power sector by the Reddy government had put at risk about 5.2 GW of solar and wind power projects, compelling 14 major renewable energy companies, including ACME Solar, ReNew Power, Greenko Holding, Axis Wind farms, Azure Power and Mytrah, to exit the state.
AP Clean Energy Policy
In October, 2024, Naidu released the ‘Andhra Pradesh Integrated Clean Energy Policy’, the guidelines for which were issued in March this year. The five-year plan aims to add over 160 GW of renewable energy capacity, with a potential to attract investments worth Rs 10 lakh crore, and generating direct or indirect employment for about 7.5 lakh people.
It involves large-scale promotion of renewable energy, pumped storage plants, and green hydrogen and its derivatives.
The state is trying to attract investments by promising fast-tracked clearances and facilitation in acquiring land, among other things. “We took only 60 to 70 days to approve projects worth Rs 71,400 crore in the clean energy space. The government is personally ensuring that proposals move fast. All associated departments are working round the clock to expedite paperwork,” an official privy to the projects said.
Flurry of investments in 7 months
It has been seven months since the policy was announced and business barons have already started making a beeline in Andhra Pradesh.
Mukesh Ambani-led Reliance Industries Ltd (RIL) signed a memorandum of understanding with the Andhra Pradesh government in November 2024 to invest Rs 65,000 crore for setting up of 500 compressed biogas plants in different districts with an aggregate capacity of 11,000 million tonnes.
Tata Power has also announced it will invest Rs 49,000 crore to build up to 7 GW of solar, wind and hybrid projects under the state's Integrated Clean Energy Policy.
Greenko Group is investing Rs 35,070 crore to build the largest integrated renewable energy project having 5 GW of RE capacity and 1.7 GW (GWh) hours of pumped hydropower generation.
Now, ReNew Power is going to unveil a Rs 22,000-crore renewable energy project on May 16 that will have a capacity of 2.5 GW and a battery energy storage system of 1 GWh.
“The state of Andhra Pradesh presents an attractive mix of investor-friendly policies, excellent transmission connectivity and abundant availability of solar and wind resources. We are highly optimistic about developing large-scale renewable energy capacity in the state to contribute to India's commitment of achieving the target of 500 GW non-fossil fuel electricity generation capacity by the year 2030,” chairman Sinha told Moneycontrol.
Government’s outreach
State government officials said investments are being brought in through personal meetings with company proprietors and CEOs as well.
Similar to how state industries minister Lokesh's dinner meeting with Sinha in Davos clinched the deal, the RIL investment plan was finalised in a meeting in Mumbai with Anant Ambani, who leads RIL’s clean energy initiatives. For the Tata Power deal, a meeting was held with Natarajan Chandrasekaran, chairman of Tata Sons, eight months ago, officials said.
Disclosure: Moneycontrol is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.
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