Qatari fund to back Indian renewables via investment in Adani’s Mumbai unit

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Mumbai. Source: Arian Zwegers, Flickr

Qatar’s sovereign wealth fund has bought a 25.1% stake in Adani Electricity Mumbai for INR 3,200 Crore (US$450 million) in a deal that has cemented a target of generating more than 30% of the utility’s electricity from solar and wind by 2023.

The capital injection by the 14-year old Qatari Investment Authority (QIA) includes a shareholder subordinated debt in the Mumbai electricity company, the flagship transmission and distribution company of Adani Transmission and India's largest private-sector integrated power utility.

The utility supplies to more than 3 million people in the densely-populated city, or 67% of the city’s total market by customer.

Alongside the joint pledge to meet a 30%-by-2023 renewables mix, the two companies have agreed on a “number of other green initiatives to combat climate change and facilitate the transition to a sustainable, green economy,” according to a release.

The Adani Group’s renewables division, Adani Green Energy, is one of the largest developers in India. In early December, the company signed a framework sales agreement with LONGi for 1,200MW of modules through 2020.

The transaction between the state of Qatar's sovereign fund and Adani Transmission is expected to complete in early 2020, subject to receipt of regulatory approvals and other conditions being met.

QIA chief executive officer Mansoor Al-Mahmoud said in a prepared statement that the investment “demonstrates our confidence in India, with whom Qatar shares deep-rooted ties and excellent relations.”

SKN Advisors Limited acted as financial advisor and Cyril Amarchand Mangaldas acted as legal advisor to ATL and AEML for the transaction. J.P. Morgan acted as financial advisor and Cleary Gottlieb Steen & Hamilton LLP and AZB & Partners acted as legal advisors to QIA.

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