Green power is hot again, Stonepeak circles AM Green for mega deal

The proposed stake sale in AM Green (Luxembourg) S.à r.l. is likely to conclude within a month, the people cited above said on the condition of anonymity. AM Green, owned by the Greenko Group founders Anil Chalamalasetty and Mahesh Kolli, will use some of the money to repay its private credit of $650 million. That amount was borrowed to buy 17.5% in Greenko Energy Holdings from Japan’s financial services firm Orix Corp, a deal that valued the Hyderabad-based Greenko at $7.5 billion. The rest of the money will go into AM Green’s bio-fuel, aluminium and ammonia projects, which form part of its $20-billion capex strategy.

Japan’s Mitsui & Co. is also doing due diligence for a stake in AM Green at the holding company level, and has signed a memorandum of understanding (MoU) with it for strategic collaboration on energy transition initiatives and potential investment pathways.

“Under the MoU with Mitsui, the parties will assess potential investment in AM Green Metals value chain," an 18 December joint statement by the two companies said.

“The proposed Stonepeak deal has the same terms as those offered to Mitsui," one of the two people cited above said.

Mint first reported about AM Green’s Greenko deal in 2025 where Orix got $650 million in cash, plus $750 million worth of stock amounting to 10% through convertible notes. Chalamalasetty and Kolli hold the balance 90% in AM Green. The duo also holds around 25% stake in Greenko Energy, through their personal stakes as well as the stake held by AM Green.

Queries emailed to the spokespersons of Stonepeak, Mitsui and Orix on Thursday evening weren’t immediately answered. Kolli, president of AM Green Group and president and joint managing director of Greenko Group, declined to comment.

Capex plans

AM Green's subsidiary AM Green Aluminium Metals and Materials is building a 1 million tonnes per annum (mtpa) primary aluminium smelter along with 2 mtpa of alumina refining and mining operations, in the backdrop of several developed economies imposing carbon taxes on imports and stricter compliance norms.

AM Green is also setting up production facilities for green molecules, including green hydrogen, green ammonia, biofuels, e-methanol, sustainable aviation fuels, and various downstream high-value chemicals for decarbonization in hard-to-abate industries.

Stonepeak is not new to India’s green energy space. It has invested in Indian renewable energy space and was among the bidders shortlisted to submit a binding offer to buy European alternative asset manager EQT and Singapore’s Temasek-owned O2 Power, a renewable energy platform in India. The deal had equity and enterprise values of around $1 billion and $2.3 billion respectively. With around $80 billion of assets under management, Stonepeak focusses on infrastructure and real assets.

Mint previously reported that Malaysia’s Gentari Sdn Bhd and Singapore’s GIC Holdings Pte Ltd plan to invest $1.75 billion in AM Green Ammonia, marking one of the largest energy transition deals in the world. Earlier, global mining major Rio Tinto and AMG Metals & Minerals signed an MoU to establish the world’s largest renewable-powered aluminium facility in India, with an investment of about $6 billion.

Also, state-run Coal India Ltd has signed an MoU to supply 4.5GW of renewable power to AM Green’s green ammonia facilities. In addition, AM Green Ammonia B.V. has partnered with Germany’s RWE Supply & Trading to supply green ammonia. Also, AM Green has collaborated with global logistics major DP World to set up advanced logistics and storage infrastructure for green hydrogen and green ammonia exports.

AM Green also plans to produce 5 million tonnes per annum (mtpa) of green ammonia, with the first 1 mtpa project in Kakinada expected to be commissioned in 2026. The project, which includes a green hydrogen unit and ammonia conversion plant at a repurposed urea facility acquired in 2024, will cost about Rs12,500 crore. AM Green has already signed offtake agreements with major buyers including Uniper, Yara, and Keppel.

Green journey

Mint had earlier reported about AM Green foraying into 2G or second-generation biofuels and plans to invest $1 billion for setting up two bio-ethanol plants in the country. As part of this playbook, AM Green acquired Finnish state-run energy power utility Fortum Oyj and Chempolis Oy’50% stake in their joint venture—Assam Bio Refinery Pvt. Ltd—and also the Oulu-headquartered biotechnology firm Chempolis Oy.

Investors’ interest in India’s green energy space has been sustained despite emerging challenges such as power distribution companies signing costly coal-fuelled power purchase agreements (PPA) rather than cheaper green power, as reported by Mint earlier. Also, 43GW of green power capacity involving ₹2.1 trillion proposed investment doesn't have PPAs and power supply agreements (PSAs) in place. In addition, there is curtailment of green power generation in Rajasthan and Gujarat, two of India's largest renewable power generating states.

United Nations Environment Programme Finance Initiative (UNEP FI) in its November report said India has witnessed a significant growth on the energy transition front. The report said that India grew its renewable energy by more than three times its electricity demand growth in 2024, causing its coal and gas use to fall by 3.1% and 34% respectively.

"Eighty-three per cent of India’s power sector investment went to clean energy in the same period. Investment in India’s renewable energy sector for the last quarter of that same year totalled over US$4.66 billion, marking a dramatic 91.5 per cent year-on-year increase," it said.

A recent report by World Economic Forum added that although the energy transition race and the related investment scenario have so far been dominated by China, which spends nearly as much on clean energy as the US and EU combined and leads manufacturing across most clean and advanced energy supply chains, India also demonstrates great ambitions and progress in this race.