Qatar Investment Authority has agreed to buy a 25.1% stake in Adani Electricity Mumbai Ltd — the firm that distributes power to three million consumers in Mumbai — for ₹3,200 crore.
Adani Electricity Mumbai Ltd is a part of Adani Transmission Ltd, while Qatar Investment Authority (QIA) is the sovereign wealth fund of the Qatar.
“Adani Transmission Limited (ATL), Adani Electricity Mumbai Ltd (AEML) and a subsidiary of Qatar Investment Authority (QIA) have signed definitive agreements for the sale of a 25.1% stake in AEML to QIA and for a shareholder subordinated debt investment by QIA in AEML.
“The total QIA investment in AEML will be approximately ₹3,200 crore,” a company statement said.
AEML is the licensee for an integrated power distribution, transmission and generation business that currently serves more than three million consumers across a license area of about 400 square kilometers in Mumbai.
Its market share of Mumbai is close to 87% by license area, 67% by consumers served and 55% by electricity supplied.
“As part of the transaction, ATL and QIA have agreed definitive plans to ensure that over 30% of the electricity supplied by AEML is sourced from solar and wind power plants by the year 2023,” the statement said.
“In addition, ATL and QIA have agreed a number of other green initiatives to combat climate change and facilitate the transition to a sustainable, low carbon economy.”
Adani Group Chairman Gautam Adani said his company together with Qatar Investment Authority will work towards improving the reliability of supply and consumer satisfaction.
“We believe this transaction is a significant step in the journey of the Adani Group, marking the start of a long term partnership with QIA,” he said.
QIA Chief Executive Officer Mansoor Al-Mahmoud said: “We look forward to a long term partnership with the Adani Group, with whom we share an inter-generational perspective on investments and a common vision for the sustainable growth and continued success of AEML.”
Adani Electricity Mumbai Limited said it serves over three million consumers spread across 400 sq km in Mumbai and its suburbs meeting close to 2,000 MW of power demand with 99.99% reliability.
Adani Transmission Ltd is the transmission and distribution business arm of the Adani Group with a cumulative transmission network of around 14,738 circut km, out of which 11,477 ckt km is operational and 3,261 ckt km is at various stages of construction.
Al-Mahmoud further said “this investment demonstrates our confidence in India, with whom Qatar shares deep-rooted ties and excellent relations.”
The deal is expected to complete in early 2020 subject to receipt of regulatory approvals and satisfaction of customary conditions precedent.
SKN Advisors Ltd acted as financial advisor and Cyril Amarchand Mangaldas acted as legal advisor to ATL and AEML on the Transaction.
JP Morgan acted as financial advisor and Cleary Gottlieb Steen amd Hamilton LLP and AZB and Partners acted as legal advisors to QIA on the transaction.