NEW DELHI
: Recent Delhi: Gentari Sdn Bhd, a unit of Malaysian state-owned oil and gas company Petroliam Nasional Bhd (Petronas), which has been actively pursuing green energy assets in India, is now planning to raise minority funds in its proposed commercial and industrial (C&I) company through a deal capital of about $400 million, said two people aware of the investment.
This will include the sale of up to 49% stake in a 3.5 gigawatt (GW) asset that will supply electricity to the AM Green unit founded by Mahesh Kolli and Anil Kumar Chalamalasetty, founders of Greenko Group. The unit will produce 5 million tonnes per annum (mtpa) of green ammonia, equivalent to approximately 1 mtpa of green hydrogen. The power purchase agreement covers the supply of 5 GW to AM Green Ammonia Holdings, in which Gentari is also investing $1.5 billion for a 30% stake.
“The total PPA is for the supply of 5 GW, for which construction of 3 GW has started. Gentari is looking for partners for the remaining production capacity,” said one of the two people quoted above, asking for anonymity.
India’s C&I segment is attracting sturdy investor interest due to a favorable regulatory landscape with rules in place that allow gigantic power users to source power from the open market rather than the more costly grid. C&I projects are also protected from risks such as restrictions on energy purchases by state-owned power distribution companies.
“The raising of the minority fund by Gentari aims to develop renewable energy supply capacity for AM Green,” said the second person quoted above, who also did not want to remain anonymous.
Global oil majors such as Shell Plc, France’s TotalEnergys, Thailand’s PTT Group and Petronas through Gentari have already established their presence in India’s green energy sector as the conventional hydrocarbon space is undergoing massive disruption amid increasing focus on green hydrogen and energy storage. Petronas established Gentari in June 2022 to accelerate neat energy deployment and build 40 GW of renewable capacity, delivering 1.2 million tonnes of green hydrogen annually and establishing electric vehicle (EV) charging points across the Asia-Pacific region, with focus on malaysia and india.
A Petronas spokesman said in an emailed response: “We have nothing to add on this matter.”
Gentari has been actively engaged in India’s green energy transformation. The company emerged as the winning bidder for Finnish company Fortum Oyj’s Indian solar projects with a total capacity of 185 MW in a deal that has an enterprise value of around $200 million and an equity value of around $150 million. It also announced the formation of an equal joint venture (JV) with ReNew Energy Global Plc to develop 5 GW capacity, under which Gentari Renewables India Pte. Ltd will hold a 50% stake in ReNew’s 5 GW Nasdaq-listed renewable energy portfolio, which includes solar, wind and energy storage projects.
Previously, Gentari also participated in the fight to purchase photovoltaic projects with a total capacity of 350 megawatts (MW) from O2 Power, and the leader emerged as Sekura Energy Ltd, a platform focused on the energy sector of the Edelweiss Infrastructure Yield Plus Fund.
As previously reported by Mint, the Indian C&I sector has seen continued investor interest and high transaction volume. Recently, Noida-based INOXGFL Group decided to sell a majority stake in its C&I business and engaged EY to conduct the sale process for the transaction, which has a potential equity value of approximately $200 million. Additionally, Sterlite Power-promoted Serentica Renewables plans to sell minority stakes to raise approximately $300 million and appoint a sell-side banker to lead the process.
Also, Radiance Renewables Pvt., backed by EverSource Capital. Ltd granted to Rothschild & Co. formal mandate to sell the C&I platform and there is sturdy interest in acquiring Macquarie Asset Management Green Investment Group’s Vivid Energy platform, which has a 1.5 GW C&I portfolio.
In addition, Sanjeev Aggarwal, founder and president of Hexa Climate Solutions, together with I Squared Capital have established Hexa Climate Solutions, under which a Recent York private equity fund will invest approximately USD 500 million in a company serving the C&I sector.