Announcing the biggest investment in solar energy in India, Japan’s SoftBank said it would invest $20 billion along with Bharti Enterprises and Foxconn in setting up solar power parks in India. The joint venture, SBG Cleantech, will initially set up solar parks on imported equipment and subsequently, look at manufacturing solar panels in India.
“It (SBG Cleantech) will be majority-controlled by SoftBank. Bharti will be taking a strategic minority interest in the business and Foxconn will be taking minority stake, too. The three of us will be a right combination to provide a viable, long-term and sustainable business opportunity,” Sunil Bharti Mittal, chairman of Bharti Enterprises, said at a press conference here on Monday.
Earlier in the day, Mittal and SoftBank Chairman Masayoshi Son met Prime Minister Narendra Modi, Union power minister Piyush Goyal and minister of state for finance, Jayant Sinha.
“The investment will be made through the next 10 years. Acceleration will depend on the support of the central government, the local governments and NTPC. If we have stable scale and if land is available to us, manufacturing of solar equipment will also make sense,” said Son. For setting up solar parks, the partners will initially look at Andhra Pradesh and Rajasthan.
In January this year, US solar power company SunEdison and Adani Enterprises had announced a plan to invest up to $4 billion in solar panel manufacturing.
Of the 100-Gw target set by the PM, the SoftBank venture will look at solar power generation of 20 Gw. “With this partnership, our goal is to create a market-leading clean energy company to fuel India’s growth with clean and renewable sources of energy,” said Son.
He added the investment in solar power was “an endorsement of next-generation India”. Three years ago, Japan had seen an energy crisis, he said, adding the group had stepped in to address some of the issues at that time. Now, it was extending that acquired expertise to India.
SoftBank has 20 solar projects in Japan. “Each project in Japan is small because the size of land is small. But I have enough experience to expand in India, especially because India has two times more sunshine than Japan. Second, the cost of construction in India is half of that in Japan. Twice the sunshine and half the cost mean four times more efficiency in creating solar energy parks in India.”
Mittal said SBG Cleantech would have Bharti veteran Manoj Kohli, who until recently led Bharti’s emerging businesses, as executive chairman and Raman Nanda as chief executive officer. The company will be headquartered in New Delhi. In India, the solar power segment is likely to grow 250 per cent this year. Globally, renewable energy outpaced the growth of fossil fuels this year and a record 107 Gw was added through wind, solar, geothermal and other natural sources.
SoftBank is the largest investor in Chinese e-commerce giant Alibaba Group Holding Ltd. In India, the internet and telecommunications major has major investments in e-commerce marketplace Snapdeal and taxi aggregator Ola, apart from other investments in web-based start-ups such as Housing.com, Scoopwhoop (in partnership with Bharti) and mobile advertising network InMobi. It holds about 30 per cent stake in Snapdeal, following its $627-million investment in the company last year. The group has invested $210 million in Ola. It is speculated Softbank could infuse more funds in Snapdeal in the near future.
Last year, Son had said the group would invest $10 billion in India through the next 10 years. On Monday, he said SoftBank had already invested $1 billion in the past nine months. “So, we are going at the right pace, and we are not only looking at the internet space.” He said with Monday’s announcement, he had already exceeded his target of $10 billion, adding the investment in India could go up to $28-35 billion. “We are focussed on the information revolution and on top of that, green renewal energy is our agenda.”