Global private equity giant KKR has agreed to invest $400 million (around Rs 3,300 crore) in Serentica Renewables, a decarbonization platform that seeks to enable energy transition by providing clean energy solutions.
KKR makes its investment from its Asia Pacific Infrastructure strategy. The transaction in Serentica marks KKR’s latest investment in India and the renewables sector, both the companies said in a statement.
Established in 2022, Serentica Renewables is 100% held by Twinstar Overseas Ltd, which is owned by Indian businessman Anil Agarwal’s Volcan Investments Cyprus Ltd. Agarwal's Twinstar Overseas Ltd also owns controlling stakes in Sterlite Power Transmission Ltd and Sterlite Technologies Ltd.
Gurugram-based Serentica is focused on industrial decarbonization, by making renewables the primary source of energy for the commercial & industrial segment which consumes more than 50% of the electricity generated in India. Serentica aims to provide assured renewable energy through a combination of solar, wind, energy storage and balancing solutions.
KKR’s most recent investment in the renewable space was $450 million (around Rs 3,585 crore) in Hero Future Energies (HFE), the renewable energy arm of the Hero Group.
“Our investment in Serentica reflects KKR’s confidence in India’s renewables sector and our commitment to advancing the energy transition in India. Energy-intensive, heavy-industry companies play an important role in society but have traditionally faced more challenges in meeting energy needs sustainably. With Serentica, we look to support these companies in their decarbonization objectives,” said Hardik Shah, partner at KKR.
Standard Chartered Bank acted as the sole financial adviser to Serentica for this transaction.
Serentica recently launched Renewable Energy Platform in India to deliver round-the-clock clean energy solutions for large-scale, energy-intensive industrial customers. This includes providing renewable energy solutions through long-term power purchase agreements (PPAs) and working closely with customers to design their paths to net-zero electricity, the statement added.
Currently, the company has entered into three long-term PPAs and is in the process of developing over 1,500 MW of solar and wind power projects across various states including Karnataka, Rajasthan, and Maharashtra.
“This investment will allow us to leap ahead in our vision of decarbonizing large energy intensive industries and help in reversing climate change. This transaction is amongst the largest industrial decarbonization investments in India to date and carries forward the global decarbonization agenda which is centre stage at COP27 (2022 United Nations Climate Change Conference),” said Pratik Agarwal, director of Serentica Renewables.
Serentica’s medium term goal is to install 5,000 MW of carbon-free generation capacity coupled with different storage technologies and supply over 16 billion units of clean energy annually and displace 20 million tonnes of CO2 emissions.
The renewable firm is hopeful that the rise in energy demands alongside India’s developmental needs and prosperity, holds significant potential for renewable energy to play an important role in meeting the energy needs of the industrial sector in a sustainable manner.
In Asia Pacific, KKR sees renewables as core to its infrastructure strategy and seeks to invest behind the significant opportunities across the region. In 2020, it had set up Virescent Infrastructure, a renewable energy platform to own and operate renewable assets in India.
This year, KKR launched Aster Renewable Energy, a renewables platform to develop, build and operate solar, wind, and energy storage projects in Taiwan and Vietnam, with a view to expand to other markets across the region.
KKR sponsors investment funds that invest in private equity, credit and real assets and has strategic partners that manage hedge funds.
The private equity investor has committed over $25 billion in equity globally to climate and environmental sustainability investments as on 31 December, 2021.
Last month, it agreed to buy digital solutions provider Ness Digital Engineering from The Rohatyn Group (TRG). Earlier this year, it inked a deal with home décor startup Livspace and a minority stake in Shriram General Insurance.