11.10.21

RIL boosts solar biz

Mukesh Ambani’s $10-billion renewables dream will take wings with acquisition of Norway-based solar panel manufacturer REC Solar Holdings and a 40% stake in Sterling & Wilson Solar, a Shapoorji Pallonji group company, with a combined deal value that will be more than Rs 9,300 crore.

Reliance New Energy Solar, a wholly owned subsidiary of Reliance Industries, on Sunday acquired 100% shareholding of REC Solar Holdings AS from China National Bluestar (Group) Co, for an Enterprise Value of $771 million (Rs 5,800 crore).

Simultaneously, RNESL also executed definitive agreements with Shapoorji Pallonji and Company, Khurshed Daruvala and Sterling & Wilson Solar to acquire 40% stake post-money in SWSL through a series of transactions.

These transactions include a 15.9% preferential allotment, purchase of 9.7% stake from the promoters and an open offer for 26%.

Altogether, the transactions could entail total investment of up to Rs 3,900 crore, depending on the price at which the open offer is made.

These are the first steps in green energy by the oil-to-retail and telecom giant. While they may not match the recent Adani Green Energy’s acquisition of SoftBank-promoted SB Energy for $3.5 billion, they indicate RNESL’s ambitions to establish a dominant position in the global green energy arena.

The acquisition of REC Solar will help Reliance expand in the US, Europe, Australia and elsewhere in Asia. The 40% stake in Sterling & Wilson Solar will provide Reliance the capability to execute clean energy projects globally. With 11-plus GW of solar turnkey projects executed globally and more than five decades of engineering experience, SWSL is a leading international EPC and O&M service provider in the renewables sector. The company has a 3,000 strong team and presence across 24 countries.

REC manufactures solar grade polysilicon as well as solar panel and modules at facilities in Norway and Singapore. It has more than 1,300 employees globally, Reliance Industries said in a statement. Reliance said it will use REC’s technology to manufacture metallic silicon and solar panels at its proposed gigafactory at Jamnagar in Gujarat with initial annual capacity of 4 GW (gigawatts), which will be raised to 10GW.

The acquisition of REC Solar is part of $2 billion — out of the $10-billion renewables plan — Ambani had earmarked for acquisitions to create clean energy capabilities. “It is in line with our strategy of investing in new and advanced technologies and operating capabilities aimed at achieving Reliance’s goal of enabling 100GW clean and green energy before the end of this decade,” the statement quoted Ambani as saying.

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