Billionaire Mukesh Ambani-led Reliance Industries Limited (RIL) on Sunday announced acquisition of REC Solar Holdings for an enterprise value of $771 million from China National Bluestar (Group) Company Limited as it seeks to become net carbon zero by 2035.
This is the first major renewable energy deal in which an equipment manufacturing facility has been acquired. In other recent deals, such as the ones between Adani and SB Energy, renewable energy projects or companies that have installed power generation capacity are involved.
While the REC Group is based in Norway, it was controlled by the Chinese government-owned China National Chemical Corporation (ChemChina), which holds 79.5 per cent stake in China National Bluestar (Group) Company. Bluestar had acquired REC Solar in 2014 for $640 million.
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"Together with our other recent investments, Reliance is now ready to set up a global scale integrated Photovoltaic Giga factory and make India a manufacturing hub for lowest cost and highest efficiency solar panels," Mr Ambani said in the statement.
“REC is headquartered in Norway and has its operational headquarters in Singapore and regional hubs in North America, Europe, Australia, and Asia-Pacific. The 25-year-old company has three manufacturing facilities-–two in Norway for making solar grade polysilicon and one in Singapore making PV cells and modules,” the RIL statement added.
Back in 2014, REC Group was facing high costs and price competition from other Chinese solar equipment manufacturers. The decision to shift operational headquarters and manufacturing facilities out of Norway was aimed at lowering costs.
The purchase of the Norwegian solar panel maker by the conglomerate's Reliance New Energy Solar Limited (RNESL) follows the June announcement by RIL that it would invest $10.1 billion in clean energy over three years.
Reliance plans to build solar capacity of at least 100 gigawatts (GW) by 2030, accounting for over a fifth of India's target of installing 450 GW by the end of this decade.
The group aims to build four "giga factories" to produce solar cells and modules, energy storage batteries, fuel cells and green hydrogen.
Reliance said it would use REC's technology in its PV Panel making giga factory, with initial annual capacity of 4 GW, eventually rising to 10 GW.
Reliance's green push comes as India raises its renewable energy capacity, currently about 100 GW, to meet about two-fifths of its electricity needs by 2030 under the Paris climate accord.
