JSW-backed O2 power to invest Rs 43,000 cr in renewable projects across Rajasthan, Bihar

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Clean energy firm O2 Power, which is being acquired by JSW Energy, is set to invest over Rs 40,000 crore in several renewable projects across Rajasthan and Bihar, founder and chief executive officer Parag Sharma told Moneycontrol in an interview on February 28.

This development comes as existing shareholders in O2—Sweden's EQT and Singapore's Temasek—initiate their exit process, selling  stake to JSW Energy.

O2 Power is a renewable energy platform with a capacity of 4,696 mega watt (MW). Of this, 2,259 MW will be operational by June 2025, 1,463 MW is currently under development, and an additional 974 MW is in the pipeline. All the projects are scheduled to be commissioned by June 2027.

"We have to reach a 4.7 GW commissioning target.  These are the projects which we have already won. We are planning to commission them in 2-3 years," Sharma told Moneycontrol.  Speaking about expansion plans, Sharma said that the company is looking to invest Rs 40,000 crore in solar, wind, and green hydrogen projects across Barmer (Sheo), Jaisalmer (Fatehgarh), Jalore, and Pali.

Additionally, O2 Power is planning solar projects worth Rs 3,000 crore in Bihar's Darbhanga, Gaya, and Aurangabad .

The projects in both the states are expected to create 200 direct jobs with the support of the respective state governments, Sharma said. Production is expected to start in 2027, he said.  Separately, the company has signed an agreement for a Rs 5,500-crore,  1,000-MW hybrid energy project in Madhya Pradesh.

The Trump effect

The capex announcement comes at a time when the raw materials for solar projects, such as cells, are available at much cheaper costs due to oversupply. US President Donald Trump's tariffs on China has triggered increased imports, prompting developers to accelerate the capex to reap benefits from the current prices. Last week, Acme Solar too announced a capex of Rs 17,000 crore for its solar and wind projects.

"If we talk about modules, we touched the bottom of even cells being available for 3 cents. Now it is slightly higher, more closer to 4 cents. But overall, solar cell prices are at the lowest. And if we talk about battery cells and the battery value chain... that's very favourable over the last one year. Prices have been almost half for battery cells. Prices are very reasonable, both for the cells and the battery value chain and also for solar modules," Sharma said.   Currently, O2 power sources cells and modules from China and Vietnam.

Last year, JSW Energy announced an agreement to acquire O2 Power at an enterprise value of approximately Rs 12,468 crore. The transaction entails the acquisition of O2
Power Midco Holdings Pte. Ltd. and O2 Energy SG Pte. Ltd and is subject to approval of the Competition Commission of India (CCI).

Sharma clarified that the transaction  is still in process. He noted that the deal is structured in such a way that only the promoter changes and the existing O2 management and team will remain intact.