BlackRock and Mubadala sign deal with Tata Power to create major renewables platform in India

A consortium led by BlackRock Real Assets and Abu Dhabi’s Mubadala Investment Company will invest US $525 million in a subsidiary of India’s Tata Power to take a 10.53 percent stake and create India’s “most comprehensible” renewable energy platform, the company said.

The stake in Tata Power Renewable Energy translates into a base equity valuation of $4.46 billion, Mubadala said in a statement.

According to analysts, the investment will spur Tata Power Renewable Energy’s aggressive growth plans in the rooftop and electric vehicle charging space across India. Tata Power said in a separate regulatory filing that it is targeting a portfolio of over 20 gigawatts (GW) of renewables assets over the next five years from its current 4.9 GW capacity.

Speaking to media after announcing the agreement, Praveer Sinha, CEO and Managing Director, Tata Power Company, said the equity stake by BlackRock Real Assets and Mubadala provided a better valuation in this space of similar nature.

“Compared to anyone in the country, because this is a large platform, we (got) many more times than what other similar deals (have managed); considering the fact that most of the deals have been in utility scale business while we are offering the largest platform, not only for utility scale but for roof tops, solar farms and electric vehicles,” Sinha said.

The first round of investment – through equity or compulsorily convertible instruments – is expected to be completed by June and the rest by the end of 2022. The funds will be enough for setting up 3-4 GW capacity in the next two years, Sinha said.

Last week, UAE-based International Holding Company PJSC (IHC) said it will invest $2 billion as primary capital in three Adani group companies in India – Adani Green Energy, Adani Transmission and Adani Enterprises – through the preferential allotment route.