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SoftBank Group Corp. is selling its Delhi-based renewable-energy unit to an Indian rival, a step that effectively pulls the plug on what was once the world’s most ambitious solar investor.

Adani Green Energy Ltd. said Wednesday it was buying SB Energy India in a deal that values the unit at $3.5 billion, an amount it said would be India’s largest renewable-energy transaction. The unit has nearly five gigawatts of renewable-power assets in India—mostly solar power—and is 80% owned by SoftBank, with the remaining stake held by Indian conglomerate and longtime SoftBank partner Bharti Group. Adani didn’t say how much it was paying.

The deal involves the unit of SoftBank that had been responsible for the company’s most aggressive solar investments and plans, including a proposed $200 billion, 200 gigawatt project in Saudi Arabia that was announced with great fanfare by SoftBank Chief Executive Masayoshi Son and Saudi Crown Prince Mohammed bin Salman in 2018. That project was later shelved as competition for solar projects rose and returns on plants dropped.

SoftBank had also been struggling with tightening returns on solar projects in its biggest market of India, where it had announced a goal of building 20 gigawatts of solar power at an estimated cost of $20 billion.

SoftBank still has a Tokyo-based energy unit that holds 50 renewable-energy projects, all but one in Japan, with a capacity of around 770 megawatts. The company has also purchased solar assets in the U.S. without disclosing how much it holds.

The sale of the India energy business effectively marks the end of a push by Mr. Son to pour hundreds of billions of dollars into solar energy and build plants in Africa, Asia and the Middle East.

Meltdowns at Japan’s Fukushima nuclear plant in 2011 turned the country’s population against nuclear power and inspired Mr. Son to enter the solar business. At one point, the mercurial CEO even proposed to quit the company for a year to promote his solar plans. He was persuaded by his board to drop the idea.

Mr. Son has said he is now focused on investment in companies that use artificial intelligence to build new businesses or disrupt old ones.

At a news conference in February, Mr. Son said solar power had greatly developed in the last decade and many were investing in it. “At this point, even if we don’t, there are lots of other companies around the world that will," he said. “Now we’re negotiating to sell the business to people who want to continue it and grow it."

SoftBank declined to comment further Wednesday on its global energy business.

The deal furthers the dominance of Adani Green Energy, a unit of the Adani Group conglomerate that was already India’s biggest solar-plant developer and one of the biggest in the world. Earlier this year, French energy giant Total SE said it would pay $2.5 billion for a 20% stake in Adani Green Energy.

India has one of the world’s most aggressive solar-development targets, aiming to install 450 gigawatts of renewables by 2030. That would amount to around 55% of the total electricity capacity the country estimates it will need then.

But India is still far from that target and struggling to meet other renewables goals it has set. Supply-chain troubles during the pandemic have delayed installations and developers are seeing profits squeezed.

As of the end of March, India had around 94.4 gigawatts of renewable power installed, according to government figures, about a quarter of total power capacity.

This story has been published from a wire agency feed without modifications to the text.

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