Adani Green Energy, promoted by infrastructure tycoon Gautam Adani, has made the biggest acquisition in the country’s renewable power sector. It has now acquired SB Energy India from SoftBank of Japan and India’s Bharti Group for an enterprise valuation of approximately $3.5 billion.
With this acquisition Adani Green Energy has added 4,954 megawatts in its renewable power portfolio, which includes 84% solar capacity (4,180 MW), 9% wind-solar hybrid capacity (450 MW) and 7% wind capacity (324 MW). Out of this 1,400 MW solar capacity is currently operational, while the rest 3,554 MW is under construction.
All projects have 25 year power purchase agreements with sovereign rated entities such as Solar Energy Corporation of India Ltd, National Thermal Power Corporation Ltd and National Hydroelectric Power Corporation Ltd.
Adani Green Energy has claimed that with this acquisition it will have a total renewable capacity of 24.3 gigawatts and operating renewable capacity of 4.9 gigawatts. Adani Group Chairman Gautam Adani said, “This acquisition is another step towards the vision we stated in January 2020, wherein we laid out our plans to become the world’s largest solar player by 2025 and thereafter the world’s largest renewable company by 2030.”
In the solar energy segment this is the fourth deal struck by Adani Green in recent times. Earlier, it had acquired the domestic assets of Sterling and Wilson and Toronto-based SkyPower Global.
SB Energy had entered the Indian market in 2015 and analysts say that with this deal it is likely to exit the country. It had been looking to sell its portfolio for close to two years and talks with Adani Green gained traction after its negotiations with Canadian Pension Plan Investment Board broke down over differences in evaluations.
Bharti Enterprises Chairman Sunil Bharti Mittal said, “I am delighted that SB Energy has found a good home to carry on its pioneering journey of building a foremost renewable energy company in India.”
Gautam Adani is the second-richest Indian after Reliance Industries promoter Mukesh Ambani, and figures 24th in the Forbes World’s Billionaires list. He currently has a net worth of $50.5 billion as against $8.9 billion last year. According to the Bloomberg Billionaires Index, Adani amid the Covid-19 pandemic has recorded the largest gain of wealth in the world, beating Elon Musk and Warren Buffet.
The Adani Group has been rapidly expanding its footprint in diversified sectors, including the airports business and data centers. One of his recent big-ticket purchases is a 74% stake in the Mumbai international airport he acquired in September 2020. Shares of several Adani Group companies, including Adani Enterprises and Adani Ports and Special Economic Zone, have surged over the past one year amid the pandemic.
However, Adani Group’s businesses in Australia have landed in controversy over their plan to acquire Carmichael mine in Queensland province. Although the mine’s license was officially approved by the provincial government in 2019, it is facing numerous environmental protests.
Those opposed to the project argue that it will destroy the ancestral lands, waters and cultures of indigenous people and that increased shipping traffic will affect the Great Barrier Reef heritage area. The company claims it has followed all “federal and state legislative processes to establish land tenure for the Carmichael project.”