ADVERTISEMENT

Temasek, EQT in $500 Million India Renewable Energy Venture

Venture eventually aims to have more than four gigawatts of installed capacity across solar, wind and hybrid systems.

Temasek, EQT in $500 Million India Renewable Energy Venture
A wind turbine operates at a wind farm in Lahori, Madhya Pradesh, India. (Photographer: Dhiraj Singh/Bloomberg)

(Bloomberg) -- Follow Bloomberg on LINE messenger for all the business news and analysis you need.

Singapore’s state-owned Temasek Holdings Pte and Swedish private equity firm EQT AB have formed a $500 million venture that will invest in solar and wind power generators across India.

The O2 Power renewable energy platform, first reported by The Economic Times in November, will draw down on the funds over several years as it finds suitable deals, Temasek and EQT said in a joint press release Thursday. It aims to eventually have more than four gigawatts of installed capacity across solar, wind and hybrid systems and will be headquartered in Gurgaon, India.

The parties declined to provide a breakdown of the funding and equity split.

India plans to reduce its dependence on coal for electricity generation and lean increasingly on clean energy to curb emissions and counter air pollution. The country aims to expand its renewable power capacity to 175 gigawatts by 2022, a two-fold increase from now.

O2 Power is the latest in a series of green investments by Temasek, which aims to slash the carbon emissions of its portfolio companies in half by 2030. But it’s also planning to buy control of the world’s biggest oil-rig builder Keppel Corp., highlighting a key dilemma facing many of the world’s top deal-makers: How do you trim your climate footprint while still earning a decent return?

Temasek’s Investment Group joint head Nagi Hamiyeh told Bloomberg in October the company was considering setting up a new unit to house renewable power projects as it increasingly eyes energy investments outside of fossil fuels.

EQT’s investment in O2 Power will come from the EQT Infrastructure IV fund, which will be between 60-65% invested after the transaction is completed. O2 Power will be led by Parag Sharma as chief executive officer, Peeyush Mohit as chief operating officer, Nimish Agrwal as head of solar and Rakesh Garg as head of wind.

--With assistance from Rajesh Kumar Singh.

To contact the reporter on this story: David Ramli in Singapore at dramli1@bloomberg.net

To contact the editors responsible for this story: Katrina Nicholas at knicholas2@bloomberg.net, Marcus Wright

©2020 Bloomberg L.P.