2 min read.Updated: 12 Jan 2015, 01:19 AM ISTP.R. Sanjai
Adani signs agreement with US firm to set up a joint venture that will build a solar photovoltaic manufacturing facility
Mumbai:Adani Enterprises Ltd, the flagship company of the $9.4 billion Adani Group, on Sunday signed an agreement with US-based SunEdison Inc. to set up a joint venture that will build a solar photovoltaic manufacturing facility in Gujarat with an investment of around $4 billion.
The announcement comes amid a trade battle between India and the US at the World Trade Organization (WTO), where a dispute settlement panel has been established to hear US complaints against India’s domestic content requirements on procurement of solar cells and modules under the Jawaharlal Nehru National Solar Mission (JNNSM) programme.
The new facility will be constructed in Mundra, Gujarat, over three-four years and will vertically integrate all aspects of solar panel production on site. The facility will create enough solar panels to fuel substantial growth in India, furthering India’s goals for clean, renewable energy independence, the companies said in a joint statement.
The statement did not say how the Adani Group, which has a consolidated debt of ₹ 71,980 crore, will fund the deal.
Adani’s proposed joint venture announcement also comes at a time when the Bharatiya Janata Party (BJP)-led government has substantially revised an earlier solar energy target of achieving 20,000 megawatts (MW) capacity by 2022 to 100,000MW.
In addition, the government has ambitious plans to create 60,000MW of wind power capacity by then, with an overall investment of around ₹ 10 trillion in the renewable energy sector.
The memorandum of understanding between SunEdison and Adani Enterprises was signed in the backdrop of the seventh Vibrant Gujarat summit, inaugurated by Prime Minister Narendra Modi in Gandhinagar. Vibrant Gujarat was started in 2003 by Modi when he was chief minister of Gujarat to project the state as the preferred destination for investments and business.
Based in Gujarat, Adani’s empire has benefited from Modi’s emphasis on economic development, but the tycoon fiercely rejects suggestions that he has been granted undue favours, Reuters reported on 11 April.
On 16 May, the day that the BJP-led government assumed power, the Adani Group of companies announced the ₹ 5,500 crore Dhamra Port Co. Ltd acquisition from Larsen and Toubro Ltd and Tata Steel Ltd. In the following months, Adani announced several such acquisitions. He announced massive expansion plans, with huge funding commitments of close to ₹ 15,000 crore in India and abroad.
“India has embarked on an ambitious programme to become a world leader in power generation from renewable technologies, and sees solar as a key part in realizing that goal," said Vneet S. Jaain, chief executive officer of Adani Power Ltd, a unit of Adani Enterprises.
Ahmad Chatila, president and chief executive of SunEdison, said the joint venture will fuel the growth of solar in India and create 4,500 direct jobs and over 15,000 indirect jobs. The firm is North America’s largest solar energy services provider and a subsidiary of MEMC Electronic Materials.
Adani is one the largest private thermal power producers in India with an installed capacity of 9,280MW. The group’s three power projects are spread out across the states of Gujarat, Maharashtra and Rajasthan. It also has a 40MW solar plant at Bitta, Gujarat.
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