BlackRock, Mubadala to Invest ₹40 billion in Tata Power’s Renewables Arm for a 10% Stake

The first round of capital infusion is likely to be completed by June this year


Tata Power and BlackRock Real Assets-led consortium, including Mubadala Investment Company, have entered into a binding agreement to invest in Tata Power’s green subsidiary, Tata Power Renewable Energy Limited. BlackRock and Mubadala will invest ₹40 billion (~$525 million) in equity or compulsorily convertible instruments for a 10.53% stake in Tata Power Renewables.

The final shareholding will range from 9.76% to 11.43% on final conversion. The first round of capital infusion is expected to be completed by June 2022, and the balance funds will be infused by the end of 2022.

The proposed investment is expected to fund Tata Power Renewables’ aggressive growth plans.

This newly created platform will consist of five distinct businesses delivering long-term, customer-oriented solutions. It will house all renewable energy businesses of Tata Power, including those in –  utility-scale solar, wind & hybrid generation assets; solar cell & module manufacturing; engineering, procurement, and construction (EPC) contracting; rooftop solar infrastructure; solar pumps and electric vehicle charging infrastructure.

The broad-based portfolio of assets ensures diversified and stable revenue sources, including 25-year fixed-price power purchase agreements for grid-connected utility-scale projects.

Tata Power Renewables’ vertically integrated operations currently have approximately 4.9 GW of renewable energy assets. Over the next five years, Tata Power Renewables aims to achieve a portfolio of over 20 GW of renewables assets and a market-leading position in the rooftop and electric vehicle charging space across India.

Praveer Sinha, CEO and Managing Director of Tata Power Company, said that the collaboration with BlackRock and Mubadala will support the company to pursue exciting opportunities in the coming decades.

Tata Power Renewables recently commissioned a 300 MW solar power project in Dholera, Gujarat. The project is claimed to be India’s largest single-axis solar tracker system. It will generate 774 million units (MUs) annually.

The company’s renewables portfolio grew by 107% in Q3 2022 compared to the same period last year, adding 256 MW capacity and winning bids of 580 MW. The company’s solar EPC order book stands at ₹92.64 billion (~$1.23 billion) at the end of the quarter.

Total global corporate funding—including venture capital (VC) funding, public market, and debt financing—into the solar sector globally came to $7.5 billion through 49 deals in the first quarter (Q1) 2022, according to Mercom Capital Group’s recently published Q1 2022 Solar Funding and M&A Report.