Leading investor operating in global growth markets Abraaj Group has joined hands with the Aditya Birla Group, a $41 billion multinational conglomerate, to build a gigawatt scale renewable energy platform focused on developing solar power plants in India.

Abraaj will invest in the platform through one of its funds and the Aditya Birla Group will invest through Aditya Birla Nuvo Limited, said a statement from the company.

The partnership comes at an opportune time in the growth of the Indian renewable energy sector, it added.

The demand for power in India is growing as a result of the country’s expanding population, increasing urbanisation and related economic activities. At the same time, the Indian government has created favourable regulatory policies to increase the use of renewable energy, including setting an explicit target to achieve 100 GW of solar power capacity by 2022, compared to the current installed capacity of 4GW, it said.

All these factors as a whole creates a compelling investment opportunity for the private sector, which can help meet this significant demand for renewable energy, said the statement.

The new solar power platform will bid for projects tendered at national and state auctions, with the intent to develop and operate utility-scale solar power plants that can provide clean and cost-effective electricity to the national grid across several key states, it said.

Sev Vettivetpillai, partner and global head of Abraaj’s Thematic Funds Business, said: “The gap in energy infrastructure in growth markets translates into a long-term and sustainable investment opportunity.”

“Renewable energy is set for explosive growth thanks to technological advances, favourable policies and pricing structures that make it a competitive alternative to conventional power generation,” he said.

“At Abraaj, we see significant opportunity in India, one of the world’s biggest energy consumption markets. We look forward to working closely with the Aditya Birla Group to provide clean energy to Indian businesses, communities and consumers,” he added.

Mustafa Abdel-Wadood, partner and global head of Abraaj’s Regional Funds Business, said: “The renewable energy sector in India offers vast potential for growth and can play a transformative role in reducing dependency on fossil fuels and enhancing India’s long-term energy security.”

Dev Bhattacharya, business head, group corporate strategy, solar power & e-commerce,  Aditya Birla Group, said: “Aditya Birla Group supports the Government of India’s initiative for a greater share of renewables in the energy mix, essential for sustained economic and industrial growth.”

“This cooperation will give a boost to Aditya Birla Group’s renewable energy initiatives and contribute to reducing the carbon footprint of India as a whole,” he said.

Aditya Birla Group was advised in the transaction by Greenstone Energy Advisors. The transaction will close once customary closing conditions and requisite approvals are obtained, it added. – TradeArabia News Service