A consortium led by world’s largest fund manager BlackRock Real Assets and Abu Dhabi sovereign wealth fund Mubadala Investment Company has agreed to invest INR 4,000 crore (US$ 525 million) in Tata Power’s arm Tata Power Renewable Energy Limited (Tata Power Renewables)—a vertically integrated renewable energy company with around 4.9 GW of assets.
The proposed investment is expected to fund Tata Power Renewables’ aggressive growth plans as it targets over 20 GW of renewables assets and a market-leading position in the rooftop and electric vehicle charging space across India over the next five years.
“BlackRock Real Assets, together with Mubadala, shall invest by way of equity/compulsorily convertible instruments for a 10.53% stake in Tata Power Renewables, translating to a base equity valuation of INR 34,000 crore. The final shareholding will range from 9.76% to 11.43% on final conversion,” read a statement by Tata Power.
This newly created platform will house all the renewable energy businesses of Tata Power, including utility-scale solar, wind and hybrid generation assets; solar cell and module manufacturing; engineering, procurement and construction (EPC) contracting; rooftop solar infrastructure; solar pumps and electric vehicle charging infrastructure.
The broad-based portfolio of assets ensures diversified yet stable revenue sources, including 25-year fixed-price power purchase agreements for grid-connected utility-scale projects.
The first round of capital infusion in Tata Power Renewables is expected to be completed by June, and the balance funds will be infused by the end of December this year. Moelis & Company is the financial advisor to Tata Power, while JP Morgan is the financial advisor to BlackRock Real Assets.
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