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BlackRock, Mubadala invests Rs. 4000 crore in Tata Power for RE expansion

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Tata Power has announced that its renewable energy arm has raised Rs 4,000 crore from BlackRock Real Assets and Abu Dhabi-based sovereign investor Mubadala Investment Company, to create India's most comprehensive renewable energy platform. The investment is anticipated to fund Tata Power Renewables' aggressive growth plans.

"The Tata Power Company Ltd and BlackRock Real Assets-led consortium, including Mubadala Investment Company, has entered into a binding agreement to invest in Tata Power's renewable energy subsidiary, Tata Power Renewable Energy Limited," Tata Power said in a declaration.

It added that BlackRock Real Assets, together with Mubadala, shall invest Rs 4,000 crore ($525 million) by way of equity/ compulsorily convertible instruments for a 10.53 percent stake in Tata Power Renewables, translating to a base equity valuation of Rs 34,000 crore. The final shareholding will range from 9.76 percent to 11.43 percent on final conversion.

The statement said, "This newly created platform will consist of five distinct businesses delivering long-term, customer-oriented solutions. It will house all renewable energy businesses of Tata Power — including those in utility-scale solar, wind, and hybrid generation assets; solar cell and module manufacturing; engineering, procurement, and construction (EPC) contracting; rooftop solar infrastructure; solar pumps and electric vehicle charging infrastructure."

The broad-based portfolio of assets ensures diversified yet stable revenue sources, including 25-year fixed-price PPAs for grid-connected utility-scale projects. Tata Power Renewable is one of the largest renewable energy companies in India. Its vertically integrated operations currently have about 4.9 gigawatts of renewable energy assets.

"The proposed investment is expected to fund Tata Power Renewable's aggressive growth plans. Over the next five years, Tata Power Renewables aims to achieve a portfolio of over 20 GW of renewables assets and a market-leading position in the rooftop and electric vehicle charging space across India," Tata Power said in the statement.

Praveer Sinha, CEO and managing director of Tata Power Company said: "I am delighted to welcome BlackRock Real Assets & 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."

Anne Valentine Andrews, global head (real assets) of BlackRock, said: "We are pleased to invest alongside Tata Power in this well-diversified and vertically integrated renewables business… India's success in transitioning its energy economy will be crucial to the world's ability to meet its climate goals."

Andrews added that with one of the largest portfolios of solar and wind assets in the country and a very experienced management team, Tata Power Renewable 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.

Khaled Abdulla Al Qubaisi, CEO (real estate and infrastructure investments) at Mubadala, said: "As a responsible investor, Mubadala has a strong focus on renewable energy in multiple markets. So, we are delighted to be co-investing with BlackRock Real Assets to help progress Tata Power Renewable's ambitions in India."

Qubaisi added that with a proven track record of green and clean energy generation and an experienced management team, Tata Power is one of India's largest integrated power companies and is well-positioned to support the country's energy independence and transition.

"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." 

Author : Debi Dash
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