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MUMBAI : Reliance Industries Ltd has initiated talks with global investors to raise as much as $3 billion in equity to fuel its ambitious plans for the renewable energy business, said two people directly aware of the matter.

The discussions are at a preliminary stage, and the billionaire Mukesh Ambani-controlled refining-to-retail conglomerate has so far reached out to a select group of potential investors, including a large pension fund and a few sovereign wealth funds based in the Middle East, the people said requesting anonymity as the talks are private.

“Like Jio platforms, this time too, the discussions are being led by Manoj Modi, a RIL veteran and long-time close associate of chairman Mukesh Ambani," one of the two people said.

“The discussions are a precursor to a more formal round of talks where the valuation and structure of potential investments will be discussed," the second person said. “While the quantum of the initial fundraise has largely been decided, the final figure may change somewhat," the person added.

Neither of the people mentioned above did not say how much equity Reliance Industries plans to sell in its renewable energy business.

A spokesperson for Reliance Industries did not respond to an emailed query until press time.

Jio Platforms, which houses RIL’s digital business assets, had in 2020 raised a total of $10.3 billion through equity deals with five investors comprising Facebook, Silver Lake, Vista Equity Partners, General Atlantic and KKR.

Reliance Industries, which currently generates more than half of its revenues from refining and petrochemicals, is building the Dhirubhai Ambani Green Energy Giga Complex on 5,000 acres in Jamnagar, Gujarat. The company said last June that the complex would have giga factories to produce integrated solar photovoltaic modules, electrolyzers, fuel cells and energy storage. RIL plans to invest more than 75,000 crore in these initiatives over the next three years to become a net-zero company by 2035.

Reliance Industries’ plans echo those of other global oil firms such as Royal Dutch Shell, Eni Spa and BP Plc, who have pledged to turn net-zero carbon amid pressure from investors and green activists.

“The bulk of the new funding will go to Reliance New Energy Solar Ltd, which has announced plans to build the solar capacity of at least 100 gigawatts (GW) by 2030," the first person said.

Reliance New Energy has so far stitched four clean energy deals and a partnership to further its clean energy ambition. Last October, it acquired REC Solar Holdings AS from China National Bluestar (Group) Co. Ltd at an enterprise value of $771 million to leverage its abilities in manufacturing panels and polysilicon and gain access to a global customer base. It also on-boarded Germany’s NexWafe’s technology to deliver competitively priced PV panels and picked a 40% stake in Sterling and Wilson Solar. Last August, Reliance New Energy invested $50 million to buy equity in the US energy storage firm Ambri Inc. and to also pursue an exclusive partnership to set up a large-scale battery manufacturing facility in India that could further bring down costs for Reliance’s green energy plan.

Last December, Reliance Industries took a $736 million equivalent green loan from five banks to fund its acquisition of REC Solar, marking its first such financing. This month, it proposed 5 trillion over 15 years to for a 100GW renewable energy plant and green hydrogen eco-system development in Gujarat.

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