MRF To Buy 19% Stake In First Energy For Solar Power Purchase

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Global vehicular tyre manufacturer MRF has said it will be picking up a stake of upto 19.10 per cent in First Energy 4 Pvt Ltd. The contract value disclosed by MRF in the announcement has been estimated to be Rs 13.09 crore. The renewable energy firm develops, constructs, operates, and maintains renewable energy-based power plants in India.

In a regulatory filing before the Bombay Stock Exchange (BSE), MRF said that the stake in First Energy would be held during the tenure of the power purchase agreement (PPA), it signed.

MRF said that the deal is to enhance its source of renewable power supply under the group captive generation mechanism under the Electricity Act.

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MRF filed before the BSE, “Pursuant to Regulation 30 the SEBI [Listing Obligations and Disclosure Requirements] Regulations, 2015, we hereby inform you that the Company has entered into a purchase agreement with First Energy 4 Private Limited for purchase of solar power and will be acquiring up to 19.10% paid up equity of the Company, which will be held during the tenure of the power purchase agreement.”

First Energy is already constructing and developing a ground-mounted grid solar electric generating project at Ottapidaram, Tuticorin District in Tamil Nadu. The solar power project will have a total installed capacity of 38.2 MW.

MRF informed that the indicative time period that will see the completion of the acquisition of the said stake in First Energy is June 2023.

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Leading tyre manufacturers are sourcing renewable energy to decarbonize their operations globally. Recently, Apollo Tyres revealed in its new ESG commitment that it will be sourcing at least 25 per cent of its power from renewable energy sources by 2026 across the globe and become carbon neutral by 2050. Before that, CEAT Ltd had completed the acquisition of a 26 per cent stake in Cleanwin Energy to source solar power.