Why global investors want to invest in Adani Green Energy

New Delhi: French energy giant Total Energies SE's $300 million investment in clean energy business of Adani Green Energy Limited has taken the total investments made in by global investors in India's largest renewable power producer to $1.63 billion or about Rs 14,000 crore.

Total announced last week that it will hold a 50 percent stake in the new joint venture firm and Adani Green Energy Ltd (AGEL) will hold the rest. The joint venture will hold a portfolio of 1,050 MW, including 300 MW of already operational capacity, 500 MW under construction and 250 MW under-development assets with a blend of solar and wind power.

Total already has a 19.7 percent stake in AGEL. It also has an equal joint venture with AGEL, called AGE23L that holds a portfolio of 2,353 MW.

Total’s $300 million investment in the joint venture is the first, since the Hindenburg report in January which highlighted Adani Group's debt pile, alleged accounting fraud and stock manipulation, which Adani denied.

Adani Green has attracted range of investors over past few months: Sources

According to the sources, AGEL is the company within the Adani Portfolio, which has attracted a range of investors over the past few months including repeat strategic investor Total, one of the largest emerging market funds GQG Capital Partners and one of the world's largest sovereign funds Qatar Investment Authority (QIA).

Together these three investors have invested $1.63 billion or close to Rs 14,000 crore over the past few months, taking advantage of the attractive valuations post the short-seller report, data shows.

GQG Partners has taken a 6.8 percent stake in AGEL while QIA picked up 2.7 percent. International Holding Company (IHC) has another 1.3 percent stake.

Adani Green's avg portfolio tariff at Rs 3.02/ unit

Explaining the rationale behind the investment, sources said, India is now a leader in the renewable energy space, with many solar and wind projects in the pipeline. Adani is the largest renewable power producer in India. With its strong execution ability and superior track record, it is in the sweet spot, said sources.

This has made Adani the largest solar power producer in India and one of the lowest cost renewable power producers in the world. Average portfolio tariff is as low as Rs 3.02 per unit as against average procurement price of the country of Rs 3.75 per unit.

It already has a portfolio of 20.4 GW across operational, under-construction, awarded and acquired assets.

Sources told PTI that the company has given a capex guidance of Rs 14,000 crore for this year for around 3 GW of projects. Next year, it is likely to do at least 5 GW, which would mean another Rs 23,000-24,000 crore.

With its capacity target to reach 45 GW, it has the potential to deliver 6x growth from FY23 and FY30, the sources told the news agency.

Around 40 GW worth resource assessment has already been completed – sites, geotechnical studies, sourcing equipment etc. With constantly upgrading technology, there are chances that there could be an upside surprise in terms of output, the sources added.

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