Reliance Will Spend Rs 9000 Crore To Buy Top Solar Panel Maker Owned By Chinese Company; Is It Ambani Vs Adani In Solar Race?
How Did This Happen?
The move is a part of the oil-to-telecom conglomerate’s Rs 75,000 crore push into clean energy.
So far, the talks are underway with global banks to raise about $500-600 million in acquisition financing for the deal and the rest will be funded via equity.
Basically, the move of acquisition will open doors for Mukesh Ambani-owned Reliance to access cutting-edge technology and global manufacturing capabilities.
As the firm continues to move forward on its plan to expand into the solar energy sector, as per the report.
REC Group Solar Panel Production
Here, REC Group is an international “member” of state-run chemicals major ChemChina, which was founded in 1996 and is the largest shareholder in Pirelli Tyres and Syngenta.
The firm is the leading European brand for solar photovoltaic (PV) panels.
It has an annual solar panel production capacity of 1.8 gigawatts (GW) and has installed around 10GW capacity globally.
Talking about India, the country is all set to develop 175GW of renewable capacity, including 100GW of solar, by 2022.
Dependency On China
Currently, the solar equipment market is dominated by Beijing-based companies such as Trina Solar Ltd, ET Solar, and Jinko Solar among others.
At present, India has a manufacturing capacity of only 3GW for solar cells and 15GW for solar modules.
The figure shows that India depends heavily on China for solar equipment.
So now, the suppliers of more than three-quarters of the world’s polysilicon, which is an essential component in most solar panels —top consumers such as India and the US are now backing local manufacturing or expanding supply sources.
Presently, about 33 percent of the polysilicon the industry used to make solar panels came from China’s Xinjiang province.
Seal The Deal
Regarding the deal, RIL has almost completed the due diligence process and bilateral talks are on to seal the deal.
In few weeks, the company is expected to make a formal announcement.
Sources said, “Earlier, Reliance has been scoping several independent power producer assets, including SB Energy, but valuations made them balk at most of those transactions. Unlike the past, they now have a clear idea of the path and so are far more focused. It’s unlikely they want to be a developer feeding to the grid or distribution companies in India. It’s more a manufacturing play to complement the Prime Minister’s energy self-reliance narrative,”.