Home / Industry / Energy /  Three sovereign funds are eyeing RIL's clean energy unit

NEW DELHI : Sovereign wealth funds including Singapore’s GIC Holdings Pte Ltd, Abu Dhabi Investment Authority (ADIA) and UAE’s Mubadala Investment Co. are exploring investments in Reliance Industries Ltd’s clean energy unit, two people aware of the development said.

In June, Reliance Industries (RIL) chairman Mukesh Ambani unveiled a 75,000-crore push into clean energy over three years through unit Reliance New Energy Solar Ltd.

“There is a lot of interest in RIL’s new energy business and also in India’s overall energy transition and decarbonization plans," said one of the two people cited above, requesting anonymity.

The growing interest in India’s green energy space comes amid investors’ focus on environmental, social and governance (ESG) goals. At the COP26 summit in Glasgow, India announced plans to increase non-fossil fuel power generation capacity to 500 gigawatts (GW) by 2030.

GIC Holdings, ADIA and Mubadala are no strangers to India’s growing green economy or RIL. While GIC and ADIA currently back Hyderabad-based Greenko, Mubadala owns Masdar, also known as the Abu Dhabi Future Energy Co., which acquired around 20% in Hero Future Energies Pvt. Ltd in November 2019 for $150 million.

Also, GIC and ADIA paid 5,512.5 crore each to buy 1.22% and 1.20% each in RIL’s retail arm, Reliance Retail Ventures Ltd. Mubadala picked up a 1.4% stake in the retail unit for 6,247.5 crore. ADIA has invested 3,779 crore in Reliance Jio’s fibre network, and Mubadala bought a 1.85% stake in RIL’s Jio Platforms unit for 9,093.60 crore.

An ADIA spokesperson declined to comment. Queries emailed to the spokespeople for RIL, GIC and posted on Mubadala’ website on Monday night remained unanswered. Phone calls and text messages to a RIL spokesperson also remained unanswered.

Mint earlier reported that Saudi Arabian Oil Co. (Saudi Aramco), along with a clutch of financial investors, has shown initial interest in investing in Reliance New Energy.

Reliance New Energy recently announced its acquisition of REC Solar Holdings from China National Bluestar (Group) Co. Ltd for an enterprise value of $771 million. Mint reported on 8 July about RIL looking to buy REC Group.

“RIL shall continue to be Saudi Aramco’s preferred partner for investments in the private sector in India and will collaborate with Saudi Aramco & SABIC for investments in Saudi Arabia," RIL said in a 19 November statement.

According to a 7 December Goldman Sachs note to clients, “RIL is adopting a manufacturing approach to net-zero emissions with a hyper-integrated model spanning solar, battery and hydrogen and a focus on the net-zero supply chain. We expect solar to drive the bulk of the capex related to new energy business near term followed by batteries as India downstream economics is competitive and RIL has already acquired leading-edge technologies."

As outlined by Ambani in June, RIL plans to spend 60,000 crore on four so-called giga factories for making solar photovoltaic modules, electrolyzer, fuel cell and energy storage. RIL, which generates more than half its revenue from refining and chemicals, is pivoting to clean energy, with plans to set up the Dhirubhai Ambani Green Energy Giga Complex on 5,000 acres in Jamnagar and plans to help set up 100 GW of solar energy by 2030.

India’s non-fossil fuel-based capacity has surpassed the earlier 40% target under its nationally determined contribution (NDC) at COP21. According to the government, India has reached 40.1% of its installed power capacity from non-fossil fuels. This will reach 66% by 2030.

India is running what will become the world’s largest clean energy programme, with the aim of having 175GW of clean energy capacity by 2022. Reliance BP Mobility Ltd and Mahindra Group recently announced a non-binding initial agreement to explore the creation of electric vehicle products and services.

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