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Aditya Birla Group ropes in PE firm Abraaj Group for solar power venture

This cooperation will give a fillip to the Aditya Birla Group's renewable energy initiatives and help Abraaj to explore one of the world's biggest energy consumption markets


The Aditya Birla Group has announced a partnership with The Abraaj Group, a leading investor operating in global growth markets, to build a large scale renewable energyplatform focused on developing utility-scale solar powerplants in India. The Aditya Birla Group will invest in the platform through Aditya Birla Nuvo Limited (ABNL) and Abraaj will invest through one of its affiliates.

Partnership with Abraaj Group in culmination of the strategy announced by Aditya Birla Nuvo in July 2015 to foray into solar energy market, through a special purpose vehicle (SPV) or subsidiary, by bidding for upcoming solar power projects of government as well as private sector.



As per the agreement, ABNL and the Abraaj affiliate will hold 51 percent and 49 percent of the paid up share capital respectively, in Aditya Birla Renewables Limited, currently a wholly owned subsidiary of ABNL. Aditya Birla Renewables Limited, the 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 grids across several key states in India.

The partnership comes at an opportune time in the growth of the Indian renewable energy sector. The demand for power in India is rising as a result of the country’s growing population, rapid urbanisation and increasing economic activities. At the same time, the Indian government has created favourable regulatory policies to foster 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 approximately 4 GW. Together, these factors create a compelling investment opportunity for the private sector, which can help meet this significant demand for renewable energy.

Dev Bhattacharya, business head - group corporate strategy, solar power & E-commerce, Aditya Birla Group, said, “The 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 fillip to the Aditya Birla Group’s renewable energy initiatives and contribute to reducing the carbon footprint of India as a whole.”

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. 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.”

The Abraaj Group has comprehensive investment experience across the energy value chain and has invested $ 1 billion in 10 investments in global growth markets. The Abraaj Group, founded by Arif Naqvi, is a leading private equity investor, purpose-built for operating in the growth markets of Africa, Asia, Latin America, the Middle East, and Turkey. Employing over 300 people, Abraaj has over 20 offices spread across five regions with hubs in Dubai, Istanbul, Mexico City, Nairobi and Singapore. Abraaj has realised $ 5.4 billion from over 70 full and partial exits, and funds managed by Abraaj have made over 140 investments across 10 sectors including consumer, energy, financials, healthcare and utilities.

Mustafa Abdel-Wadood, partner and global head of Abraaj’s Regional Funds Business, added, “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. We are delighted to partner in this rapidly growing sector with one of India’s leading entrepreneurial groups and, together, bring our capital and expertise to bear in creating a landmark investment that can address the demands for clean energy infrastructure in the country.”

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