New Delhi: Petronas of Malaysia China has made an offer of 38 billion rupees ($460 million) to buy a 20% stake in the green energy arm of NTPC, India’s biggest power producer, three sources told Reuters.
The offer value was higher than the Rs 30 billion that NTPC had sought for expression of interest in NTPC Green Energy (NGEL) last year and was 78% higher than the second highest bidder. This values ​​NGEL at $2.3 billion.
NTPC and Petronas did not immediately respond to requests for comment. The sources declined to be named as the deal is still being finalized.
The deal was the first time an Indian state-run company had offered a stake in the renewable energy arm and came as the country’s leading player. Renewable energy The sector is attracting foreign investment.
Data from India’s Ministry of Commerce shows that renewable energy is among the country’s top five industries for foreign funds, accounting for 5% of all inflows from April to September 2022. A government official, an industry source and a banker said Petronas outbid other local firms for the stake with an offer of Rs 27.52 per share. The banker said the second highest bidder, REC Ltd, offered Rs 15.47 per share, while Indraprastha Gas Ltd (IGL) quoted Rs 6.67 per share.
REC and IGL were also not immediately available for comment.
NTPC plans to use the sale proceeds to expand its non-fossil businesses. The company has set an investment of over $30 billion over the next 10 years to increase the share of non-fossil energy in its portfolio from the current 9.41% to 45%. The company has committed to adding 60 GW of renewable energy by 2032, for a total cluster capacity of 130 GW by that date. NGEL will handle the non-fossil business of the parent company. India has set a target of becoming net-zero by 2070 and committed to have 50% of its installed electric power capacity from non-fossil fuel based energy by 2030.
The country has set a target of 500 GW of renewable energy generation by 2030. Renewable energy sources, including wind, hydro and biomass, account for 30% of the country’s current installed capacity of 412 GW.
Earlier this month, the CEO of Petronas’ clean energy arm told Reuters that India and Australia are its key markets for growth and it expects more financing to meet its ambitious targets.
The Petronas transaction needs to be approved by the federal government.
The offer value was higher than the Rs 30 billion that NTPC had sought for expression of interest in NTPC Green Energy (NGEL) last year and was 78% higher than the second highest bidder. This values ​​NGEL at $2.3 billion.
NTPC and Petronas did not immediately respond to requests for comment. The sources declined to be named as the deal is still being finalized.
The deal was the first time an Indian state-run company had offered a stake in the renewable energy arm and came as the country’s leading player. Renewable energy The sector is attracting foreign investment.
Data from India’s Ministry of Commerce shows that renewable energy is among the country’s top five industries for foreign funds, accounting for 5% of all inflows from April to September 2022. A government official, an industry source and a banker said Petronas outbid other local firms for the stake with an offer of Rs 27.52 per share. The banker said the second highest bidder, REC Ltd, offered Rs 15.47 per share, while Indraprastha Gas Ltd (IGL) quoted Rs 6.67 per share.
REC and IGL were also not immediately available for comment.
NTPC plans to use the sale proceeds to expand its non-fossil businesses. The company has set an investment of over $30 billion over the next 10 years to increase the share of non-fossil energy in its portfolio from the current 9.41% to 45%. The company has committed to adding 60 GW of renewable energy by 2032, for a total cluster capacity of 130 GW by that date. NGEL will handle the non-fossil business of the parent company. India has set a target of becoming net-zero by 2070 and committed to have 50% of its installed electric power capacity from non-fossil fuel based energy by 2030.
The country has set a target of 500 GW of renewable energy generation by 2030. Renewable energy sources, including wind, hydro and biomass, account for 30% of the country’s current installed capacity of 412 GW.
Earlier this month, the CEO of Petronas’ clean energy arm told Reuters that India and Australia are its key markets for growth and it expects more financing to meet its ambitious targets.
The Petronas transaction needs to be approved by the federal government.
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