AGEL Completes $3.5 Billion SB Energy Deal, Operational Portfolio at 5.4 GW now

Adani Green Energy Ltd (AGEL) has announced the successfully closure of the deal for the acquisition of SB Energy Holdings Ltd (SB Energy India) in an all-cash deal for which definitive agreements were signed on 18 May 2021.

With this deal, SB Energy India is now a 100% subsidiary of AGEL. Earlier, it was a 80:20 joint venture between Japan-based SoftBank Group Corp and Bharti Group. The transaction pegs SB Energy India at an enterprise valuation of USD 3.5 Bn (~Rs. 26,000 Cr) and marks the largest acquisition in the renewable energy sector in India. Even as this deal is closed, Adani Group Chairman Gautam Adani had announced plans last week for the Group to invest over 20 Bn dollars across the next 10 years in the renewable energy supply chain, from manufacturing to generation.

“This transaction takes us closer to becoming the global leader in renewables,” said Vneet S. Jaain, MD & CEO, AGEL. “The addition of these high-quality large utility-scale assets from SB Energy India demonstrates Adani Green Energy’s intent to accelerate India’s efforts to transition towards a carbon neutral future. Our renewable energy foundations will enable an entire ecosystem of new industries that can be expected to catalyse job creation in multiple sectors.”

SB Energy India had 5 GW renewable assets across four states in India through its SPVs. The portfolio holds 1,700 MW of operational renewable assets, 2,554 MW of assets under construction and 700 MW of assets near construction. Solar capacity accounts for 84% of the portfolio (4,180 MW), wind-solar hybrid capacity accounts for 9% (450 MW) and wind capacity accounts for 7% (324 MW). Split across 15 projects with an average project size of 330 MW, this is one of India’s highest quality renewable portfolios, with many of the assets being solar park-based projects and constructed using best-in-class governance, project development, construction and operations and maintenance standards.

The value accretive acquisition boosts AGEL’s operational portfolio to 5.4 GW and its overall portfolio to 19.8 GW implying a 4x growth locked-in. AGEL’s counterparty mix for its overall portfolio of 19.8 GW is further reinforced with 87% sovereign rated counterparties. The company is  also ensuring a thorough adherence to globally recognised principles such as UN Sustainable Development Goals and Science Based Targets initiative, and its ESG disclosures are aligned with GRI standards, CDP disclosure and TCFD recommendations.

While this marks the exit of Japanese investor Softbank from the renewable energy sector for now, there are enough chances that the investment group will reconsider possibly, when it sees the market ready for the kind of ambition it hopes for its invested firms.