Reliance Industries, which had unveiled its big plans in the field of clean energy at its AGM earlier this year, has announced the acquisition of REC Solar Holdings AS (REC group) and Sterling & Wilson Solar. The two acquisitions underscore Mukesh Ambani company’s ambitions to grow its renewable energy portfolio quickly.
At its AGM, Reliance had said an Integrated Solar Photovoltaic Giga factory will be set up to accelerate the production and deployment of solar grids. Reliance believes that it can achieve some of the lowest costs in the world with rooftop and decentralized solar. A target of 100 GW of power generation by 2030 has been set.
The two new acquisitions are indeed part of Ambani’s Rs 75,000 crore push into clean energy over three years. Reliance Industries plans to spend Rs 60,000 crore on four giga factories. One of the four factories will make solar photovoltaic (PV) modules.
Reliance buys REC from Chinese owner
Ambani’s newly floated energy firm Reliance New Energy Solar Ltd (RNESL), a wholly-owned subsidiary of Reliance Industries, will acquire 100% shareholding of REC Solar Holdings AS (REC Group) from China National Bluestar (Group), for around $771 million.
REC is headquartered in Norway and has its operational headquarters in Singapore and regional hubs in North America, Europe, Australia, and Asia-Pacific.
REC Group is an international pioneering solar energy company leading the industry through its technological innovations and superior, high efficiency and long-life solar cells and panels for clean and affordable solar power.
The 25-year-old company has three manufacturing facilities two in Norway for making solar grade polysilicon and one in Singapore making PV cells and modules.
“Reliance will strongly support for REC’s planned expansions including 2-3 GW Cells and Module capacity in Singapore, brand new 2 GW Cells and Module unit in France and another 1 GW Modules plant in the US,” the company said in a statement.
In India, Reliance plans to use this technology in its fully integrated, metallic Silicon to PV Panel manufacturing giga factory at Dhirubhai Ambani Green Energy Giga Complex, Jamnagar initially starting with 4 GW per annum capacity and eventually growing to 10 GW per annum.
The acquisition will facilitate the establishment of state-of-the-art next-generation fully integrated PV manufacturing facility at Dhirubhai Ambani Green Energy Giga Complex and subsequently replicate such complexes around the world.
40% stake in Sterling and Wilson Solar
In the second deal announced yesterday, Reliance has agreed to buy up to a 40% stake in Sterling and Wilson Solar through Reliance New Energy Solar.
Sterling and Wilson said on Sunday it had agreed to sell a 15.46% stake in the company to RNESL for $146.3 million by issuing new shares.
Reliance said Shapoorji Pallonji and Co, one of the promoters of Sterling and Wilson, will also sell 18.4 million shares, representing about 9.7% of the company’s post preferential share capital, to RNESL at a price of 375 per share.
The Reliance group will make an open offer to acquire a further 25.9% stake in accordance with Indian market regulation.
Sterling and Wilson Solar is a leading international EPC and O&M service provider in the renewables sector. The company has a 3,000 strong team and presence across 24 countries, and it provides a comprehensive range of solar energy turnkey solutions including design, procurement, construction, project management and operations and management.
Addressing his shareholders earlier this year, Mukesh Ambani had said, “New energy is the most exciting, most challenging and the most purpose-driven mission I’ll be pursuing in my life”.
The new announcements are perfectly in sync with those avowed ideas.