Saudi Fund Looks For A Stake In Tata Power’s Green Biz

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Saudi Arabia’s Public Investment Fund (PIF) in looking to buy a stake in Tata Power Co. Ltd’s green energy, power transmission and distribution businesses, according to two people aware of the development.

The due diligence by the sovereign wealth fund has been done, the people said on condition of anonymity.

The proposed investment by PIF is in addition to BlackRock and the UAE’s sovereign wealth fund Mubadala Investment Co.’s plan to invest in a new energy entity being floated by Tata Power, as reported by Mint earlier.

The business tentatively called “consumer renewables” will house all Tata Power assets except coal-fuelled power projects and carbon projects.

PIF, which acts as the Kingdom’s main investment arm, has around $600 billion of assets under management.

A spokesperson for Tata Power did not respond to an email query sent on Friday, and phone calls and text messages seeking comment. Queries sent to PIF on Friday also remained unanswered.

With 13.06 gigawatts (GW) of capacity, Tata Power is among India’s largest integrated power companies operating in renewable and conventional energy, electricity transmission and distribution, coal and freight, logistics and trading. It also supplies electricity to 12 million consumers through its distribution companies in North Delhi and Odisha.

In an emailed response, a spokesperson for BlackRock said, “We do not comment on market speculation.”

An external spokesperson for Mubadala said the company doesn’t comment on speculation.

Mint had earlier reported that PIF is looking to invest in India’s infrastructure sector. Some of the active sovereign wealth funds in India’s energy space from West Asia include Abu Dhabi Investment Authority, which has backed Greenko and ReNew Energy Global Plc.; Mubadala Investment Co.-owned Masdar, also known as the Abu Dhabi Future Energy Co., which acquired around 20% in Hero Future Energies Pvt. Ltd in November 2019.

Firms from the oil-rich West Asian nations have been looking to invest in India’s green energy space to diversify their holdings.

On Friday, Abu Dhabi-based International Holding Co. PJSC agreed to invest $2 billion in Adani Green Energy Ltd, Adani Transmission Ltd and Adani Enterprises Ltd.

There is a growing interest in India’s green economy, as reported by Mint earlier.

Canada’s Brookfield Asset Management Inc. is looking to buy a substantial stake in Mahindra Susten, and Shell Plc is a front-runner to acquire Actis Llp’s Indian renewable energy platform Sprng Energy. Also, Singapore’s Sembcorp Industries Ltd, Enfinity Global Inc. and JSW Group have been shortlisted to acquire green energy producer Mytrah Energy India Pvt. Ltd in a deal potentially worth around $2 billion in enterprise value.

Tata Power has been looking to dilute its stake in unit Tata Power Renewable Energy Ltd, its primary investment vehicle in clean energy, where BlackRock had reportedly evinced interest.

Tata Power had hired Citibank to find an investor for its renewable energy InvIT.

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