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NEW DELHI : 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% of Tata Power Renewables, the companies said.

The first round of capital infusion into Tata Power Renewables is expected to be completed by June and the rest by the end of the year, the companies said in a joint statement on Thursday. The Tata Power Renewables platform will house all clean energy-related businesses of parent Tata Power Co. Ltd, including those in 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, the companies said.

“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 growing interest in India’s green energy space comes amid investors’ focus on environmental, social and governance (ESG) goals. With around 4.9 gigawatts (GW) of renewable energy assets, Tata Power Renewables ranks among India’s largest clean energy firms. It plans to grow its portfolio to 20GW.

On 29 March, Mint first reported the firms being in talks to invest in a new energy entity of Tata Power Co.

“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 summit in November last year, Prime Minister Narendra Modi pledged to meet 50% of India’s energy requirements from renewable energy by 2030, cut India’s carbon emission by 1 billion tonnes by 2030 and achieve 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.

Firms from oil-rich West Asian nations have been looking to invest in India’s green energy space. Last week, Abu Dhabi-based International Holding Co. PJSC agreed to invest $2 billion in Adani Green Energy Ltd, Adani Transmission Ltd and Adani Enterprises Ltd. Mubadala-owned Masdar, also known as the Abu Dhabi Future Energy Co., acquired around 20% of Hero Future Energies Pvt. Ltd in November 2019 for $150 million.

“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.

Moelis & Co. was the financial adviser to Tata Power, while JP Morgan was the financial adviser to BlackRock Real Assets. Cyril Amarchand Mangaldas & Co. are legal advisers to Tata Power, while Slaughter & May and AZB Partners are legal advisers to BlackRock Real Assets, the statement said.

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