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Towards a ‘Greener’ future: Adani’s renewable energy vision gains traction

Posted on January 8, 2022 By dsprime 147 Comments on Towards a ‘Greener’ future: Adani’s renewable energy vision gains traction

Ahmedabad (Gujarat) [India], January 8: Gautam Adani’s plans to revamp his business empire into the world’s largest renewables player are on a roll. The initiative to tap the green bond market to fund this change is certainly bearing fruit as his ambitious $20 billion investment plan gets underway.

Adani Green Energy, which takes care of the renewables business, has been very active in the green bond market, raising $750 million through the market last September. It will not be the last as Adani reportedly told Nikkei Asia that the Group would use the market to fund its $20 billion investment plan.

The $20 billion investment plan is part of Adani’s bigger game plan to invest across the entire renewable energy chain over the next decade. It includes production and manufacturing processes along with distribution and entails a ginormous sum of $70 billion. So far, investments have been made towards the manufacturing of equipment, including electrolysers.

The Group is eager to cut down its dependence on fossil fuels, aiming to triple its renewable power generation capacity in the next four years. Currently, the share of renewables in electric generation is 21% and is expected to account for almost two-thirds once things fall into place.

Adani stated that going green was the logical choice as it opened up new avenues for growth. “Our actions indicate that we are putting our money where our mouth is as over 75% of our planned Capex until 2025 will be in green technologies,” he quipped, in one of his rare interviews, to Nikkei Asia.

Talking about funding for his ambitious project, Adani placed his confidence on green bonds. “Over the process of its development, Adani Green Energy has matured its capital management plan. The organisation has a cycle of funding under-construction assets and then de-risking operational projects through U.S.-dollar green bond refinancing, thereby releasing the credit line for the next set of construction projects”, he pointed out.

Additional sources include debt raising and equity capital, as well as the Group’s internal cash flows. As of the last financial year, the Group companies had accrued $4.3 billion (Rs. 323.4 billion) in earnings before interest, taxes, depreciation and amortisation.

Adani dismissed any notion of competing with fellow billionaire Mukesh Ambani. Ambani has revealed similar plans to turn his business into a net-zero carbon emitter by 2035. However, Adani maintained that there was enough space for everyone when it came to renewables.

However, he asserts that the Adani Group will become the world’s largest renewables company in the not-too-distant future. The company achieved its target of 25 GW renewables capacity a full four years ahead of schedule. “This puts us well on track to be the world’s largest renewable power generating company by 2030,” he declared.

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