As part of the deal, BlackRock Real Assets and Mubadala will collectively own about 10% of Tata Power Renewable Energy Ltd (TPREL) and help India’s largest conglomerate expand its clean energy operations.
According to the firms, a consortium led by the world’s largest asset manager, BlackRock, and UAE sovereign wealth fund Mubadala Investment Co. agreed to invest 4,000 crore for 10.53 percent of Tata Power Renewables.
The first round of capital injection into Tata Power Renewables is planned to be completed by June, with the remainder by the end of the year, according to a joint statement issued by the firms on Thursday. According to the companies, the Tata Power Renewables platform will house all clean energy-related businesses of parent Tata Power Co. Ltd, including utility-scale solar, wind and hybrid generation assets, solar cell and module manufacturing, engineering, procurement, and construction contracting, rooftop solar infrastructure, solar pumps, and electric vehicle charging infrastructure.
“BlackRock Real Assets and Mubadala will invest by way of equity or compulsorily convertible instruments for the 10.53% stake in Tata Power Renewables, translating to a base equity valuation of ₹34,000 crore,” the statement said, adding that the final shareholding will range from 9.76% to 11.43% on conversion.
The increased interest in India’s green energy sector coincides with investors’ emphasis on environmental, social, and governance (ESG) objectives. Tata Power Renewables is one of India’s major clean energy companies, with around 4.9 gigatonnes (GW) of renewable energy assets. It intends to expand its portfolio to 20GW.
The corporations were originally reported to be in negotiations to invest in a new energy company of Tata Power Co. on March 29, according to Mint.
“I am delighted to welcome BlackRock Real Assets and 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,” Praveer Sinha, CEO and managing director of Tata Power Co., said in the statement.
At the COP26 meeting in November last year, Prime Minister Narendra Modi vowed to satisfy half of India’s energy needs with renewable energy by 2030, to reduce carbon emissions by one billion tonnes by 2030, and to attain net-zero carbon emissions by 2070.
“With one of the largest portfolios of solar and wind assets in the country and a very experienced management team, Tata Power Renewables is at the forefront of India’s ambition to secure greater energy stability for its citizens while positioning its economy for a low carbon future. India’s success in transitioning its energy economy will be crucial to the world’s ability to meet its climate goals,” BlackRock’s global head of real assets, Anne Valentine Andrews, said in the statement.
“We are proud to show our ongoing commitment to India with this investment and look forward to working with Tata Power to capitalize on the growth opportunities ahead,” said Khaled Abdulla Al Qubaisi, Mubadala’s real estate and infrastructure investments CEO, in the statement.
Companies from oil-rich countries West Asian countries have expressed an interest in investing in India’s green energy sector. International Holding Co. PJSC, located in Abu Dhabi, agreed to invest $2 billion in Adani Green Energy Ltd, Adani Transmission Ltd, and Adani Enterprises Ltd last week. Masdar, also known as the Abu Dhabi Future Energy Co., is controlled by Mubadala and purchased about 20% of Hero Future Energies Pvt. Ltd in November 2019 for $150 million.