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BENGALURU : KKR & Co. Inc. will invest $400 million (about 3,266 crore) in billionaire Anil Agarwal-backed Serentica Renewables, underscoring the US private equity firm’s growing bets on the clean energy sector in India.

The investment will be made as part of KKR’s Asia Pacific Infrastructure strategy, the companies said in a joint statement on Tuesday. Both didn’t disclose the size of stake KKR will buy.

Serentica is a decarbonization company that seeks to provide complex clean energy solutions for energy-intensive industries.

Established in 2022, Serentica is wholly-owned by Twinstar Overseas Ltd, which is owned by Agarwal’s Volcan Investments Cyprus Ltd. Twinstar Overseas also owns controlling stakes in Sterlite Power Transmission Ltd and Sterlite Technologies Ltd.

Gurugram-based Serentica is focused on industrial decarbonization, by making renewables the main source of energy for commercial and industrial users who use over half of the electricity generated in India. Serentica aims to provide assured renewable energy through a mix of solar, wind, energy storage and balancing solutions.

“Our investment in Serentica reflects KKR’s confidence in India’s renewables sector and our commitment to advancing the energy transition in India. Energy-intensive, heavy-industry companies play an important role in society but have traditionally faced more challenges in meeting energy needs sustainably. With Serentica, we look to support these companies in their decarbonization objectives..," said Hardik Shah, partner at KKR.

Since 2011, KKR has deployed over $15 billion globally to invest in renewable assets such as solar and wind with an operational power generation capacity of 23 GW as of 31 December 2021.

In Asia Pacific, KKR sees renewables as core to its infrastructure strategy. In 2020, it set up Virescent Infrastructure, a renewable energy platform to own and operate renewable assets in India.

KKR’s most recent deal in India’s renewable sector was a $450 million investment in Hero Future Energies, the renewable energy arm of New Delhi-based Hero Group. Standard Chartered Bank acted as the sole financial advisor to Serentica for the transaction.

Serentica recently started its renewable energy platform in India to deliver continuous clean energy solutions to large-scale, energy-intensive industrial customers. The company has so far entered into three long-term power purchase agreements and is in the process of developing over 1,500 megawatts (MW) of solar and wind power projects in several states including Karnataka, Rajasthan, and Maharashtra.

“This investment will allow us to leap ahead in our vision of decarbonizing large energy intensive industries and help in reversing climate change. This transaction is amongst the largest industrial decarbonization investments in India to date and carries forward the global decarbonization agenda which is centre stage at COP27 (2022 United Nations Climate Change Conference)," said Pratik Agarwal, director of Serentica.

Serentica has set a medium-term goal of installing 5,000 MW of carbon-free generation capacity with various storage technologies and supplying over 16 billion units of clean energy annually and displacing 20 million tonnes of CO2 emissions.

ABOUT THE AUTHOR

Beena Parmar

Been Parmar is a financial journalist based in Mumbai. She has reported on the banking and finance sector for over 10 years. She now writes on the alternative investment ecosystem from India - private equity, venture capital and especially startups. She loves to read about politics, society and humane stories.
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