Private giants from Japan, Taiwan and India collaborate for $20B solar boom in India

Betting big on India’s renewable energy sector, Japan’s SoftBank Corp together with Sunil Mittal’s Bharti Enterprises and Taiwanese mobile handset maker Foxconn will invest USD 20 billion to generate 20 gigawatt of solar power.

SoftBank, which owns one of Japan’s biggest mobile carriers and is the largest shareholder in Chinese e-commerce firm Alibaba, will have majority control in the three-way joint venture company, SBG Cleantech, with Bharti and Foxconn as minority stakeholders. “Softbank will take lead and responsibility to make 20GW as a minimum commitment in solar space in India. In economic terms grossly USD 20 billion will be the scale of investment, probably it could be one of largest investment by a foreign company in India,” Softbank Chairman and CEO Masayoshi Son told reporters in New Delhi.

Government this month raised the solar power generation capacity addition target by five times to 100 gigawatts by 2022 under the National Solar Mission (NSM). “It is a joint venture project so USD 20 billion is not Softbank portion only. I would like to see this happening in next 10 years but how fast we would be able to accelerate will depend on local and central government and availability of land,” he said, adding that it would take two years for the project to start once all clearances and land is alloted.

According to PTI, Bharti Enterprises Chairman Sunil Mittal said SBG Cleantech Ltd will be headed by Manoj Kohli as its Executive Chairman, while Raman Nanda will be the Chief Executive Officer. It will be headquartered in New Delhi. The Japanese telecom and Internet major SoftBank Corp had in 2011 set up SB Energy Corp to develop clean energy projects following the Fukushima nuclear disaster in Japan.

SoftBank, which has stakes in more than 1,000 companies the world over, has invested USD 1 billion in India in past nine months out of the USD 10 billion planned investment in Asia’s third largest economy in 10 years. SBG Cleantech will be a harbinger of solar and wind energy in the country and intends to participate in the 2015-16 round of solar power plant tenders under the NSM and state-specific solar programmes.

Besides this project, Masayoshi Son said, Softbank is exploring the possibility of manufacturing solar panels in India, which gets abundant sunshine and the cost of constructing solar parks is half that of Japan. “With two times more sunshine and half cost of construction, making a solar park becomes four times more efficient. It makes business sense, economic sense and technological sense,” he said.

It would take two years to start the project from the time of land allocation, he said. “We can manufacture solar equipments here in India. It will reduce one third logistics cost if we manufacture and assemble in India. With Foxconn participation we will also create some kind of manufacturing capacity here in India,” he added. The project is looking at significant amount of debt from Japanese financial institutions, which have endorsed the project, Mittal said.

Son said that a Japanese government related bank is “making strong participation” and other Japanese commercial bank have indicated that they will participate in this project fund. “Bharti investment will be significant minority stake but it will depend upon debt to equity ratio that are being finalised. Massive debts are available for this project,” Mittal said.

Bharti Enterprises, the parent company of India’s biggest telecom company Bharti Airtel, had previously formed a 50:50 joint venture with SoftBank, Bharti SoftBank. It recently acquired 36.5 per cent stake in ScoopWhoop, an Indian-focused media startup. Bharti SoftBank also owns Hike Messenger, an Indian app that allows users to exchange texts and images via the Internet on their smartphones. In January, Hike bought US startup Zip Phone, which allows users to make and receive calls through the Internet.

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