Aditya Birla Group to sell up to 49% stake in renewable energy business to raise money

In October 2015, Aditya Birla Group agreed to partner with Abraaj Group to build a large-scale renewable energy platform in India. However, the plan was shelved due to the Abraaj Group’s collapse.

In October 2015, the Aditya Birla Group, and the Abraaj Group, a Dubai-based private equity firm, agreed to form a joint venture to build a large-scale renewable energy platform in India. The joint venture was expected to focus on developing utility-scale solar and wind power projects across India.

However, in 2018, the Abraaj Group collapsed amid allegations of financial mismanagement and fraud. The joint venture with the Aditya Birla Group was shelved, and the two companies went their separate ways.

In 2019, Aditya Birla Group announced plans to invest around $2 billion over the next few years to build renewable energy capacity in India. The company aims to achieve a total renewable energy capacity of 5 GW by 2025, which would make it one of the largest renewable energy players in the country.

Last month, Kumar Mangalam Birla, chairman of Aditya Birla Group, said in a blog post that his group companies are making investments in green energy, circular economy and sustainable materials.

"As a nation, we aim to generate 50 percent of our power requirements from renewable energy sources or put another way, have 500 GW of non-fossil fuel-based capacity by 2030. India is walking the talk as is evident from its pioneering leadership of the International Solar Alliance," Birla wrote.

India is the third largest energy-consuming country in the world, holding the same rank in the renewable energy country attractive index in 2021. Its green economy remains an attractive investment for global investors, despite the prevailing global economic headwinds. Amazon.com Inc. is one of the latest entrant in this space, procuring renewable energy to build a portfolio for sale on Indian electricity exchanges.

India has attracted $78.1 billion in investments for its renewable sector, with the world’s fourth-largest installed renewable energy capacity at 166GW.

Central Electricity Authority, India’s top power sector planning body, expects over half of the country’s 817GW power requirement by 2030 to be met through clean energy sources.

Surging demand for power and the Union government’s stance has further boosted Investor interest in India’s clean energy sector. During her budget speech, on February 1,  Finance minister Nirmala Sitharaman said, "India is moving forward firmly for the ‘panchamrit’ and net-zero carbon emission by 2070 to usher in green industrial and economic transition. This Budget builds on our focus on green growth."

India has set an ambitious target of achieving net-zero carbon emissions by 2070 while also reducing carbon intensity by 45 percent from 2005 levels. "We are implementing many programmes for green fuel, green energy, green farming, green mobility, green buildings, and green equipment, and policies for efficient use of energy across various economic sectors. These green growth efforts help in reducing the carbon intensity of the economy and provide for large-scale green job opportunities," Sitharaman said.