Abu Dhabi’s Mubadala, BlackRock Real Assets invest in Tata renewable unit

A group of investors led by BlackRock Real Assets and Mubadala Investment Co. infused INR40bn ($525m) into the renewable energy unit of Tata Power Co., the Mumbai-based company said.

The investor group will get about 10.53 per cent stake in Tata Power Renewable Energy Ltd. (TPREL) for the funds injected through equity and compulsorily convertible instruments, Tata Power said in an exchange filing on Thursday.

Tata Power board also approved moving all its renewable energy businesses into TPREL, according to the filing.

The deal reflects the pivotal position of the largest Indian conglomerate’s power unit in the clean energy transition as the country seeks to reduce its dependence on fossil fuels. A massive expansion of renewable energy generation capacity and new technologies such as green hydrogen and energy storage is underway in the South Asian nation.

The investment will help TPREL fund its aggressive growth plans, according to the filing. The company aims to expand its renewable energy assets four-fold to more than 20 gigawatts over the next five years to become the market leader in areas such as rooftop power and electric vehicle charging, it said.

The fund infusion will finance the renewable unit’s equity needs for at least 2 years, Sanjeev Churiwala, the chief financial officer of Tata Power, said in a media call after the filing. The first round of fund infusion is expected to be completed by June and the remaining by the end of 2022.

India plans to more than quadruple its renewable power generation capacity to 450 gigawatts by 2030, including 280 gigawatts of solar. The world’s third-biggest emitter of greenhouse gases switching to cleaner fuels while chasing the target of turning net carbon zero by 2070 has been invoking interest among global investors.