ONGC-NTPC Green's Mega Acquisition of Ayana Approved

ONGC-NTPC Green to Acquire Ayana Renewable Power for Rs 19,500 Crore (USD 2.3 Billion)

The India Competition Commission (CCI) gave its nod for ONGC-NTPC Green Pvt Ltd (ONGPL), a 50:50 subsidiary of ONGC Green (OGL) and NTPC Green Energy Ltd (NGEL), to acquire Ayana Renewable Power Pvt Ltd. The Rs 19,500 crore (USD 2.3 billion) transaction is a milestone in the renewable energy sector, and it boosts India's energy transition.

ONGPL, a joint venture company of state-owned energy firms ONGC-NTPC, is buying Ayana Renewable Power's 100% under the agreement. Purchased via share purchase agreement last month. National Investment and Infrastructure Fund (NIIF) holds 51%, British International Investment Plc (BII) and its subsidiary has 32%, and 17% holding by Eversource Capital.

Ayana is a leading Indian renewable energy firm with 4.1 GW of operational and under-development projects, strategically placed in the resource-rich Indian states. It is also developing an additional 3 GW of renewable energy capacity in the shape of solar, wind, and hybrid power plants. Of these, a 300 MW solar and a 140 MW wind power project are slated to be commissioned by FY25, while the rest of the assets are to be commissioned by FY26 and FY27.

The second largest India renewable energy transaction, the deal follows Adani Green Energy (AGEL) buying SB Energy India for USD 3.5 billion in 2021, another indication of the increasing importance of renewable energy investments in India.

Ayana's acquisition by ONGPL fits into ONGC Green's and NTPC Green Energy's vision, both of which share a vision to develop India's renewable energy capabilities through greenfield and brownfield acquisitions. ONGC Green, a subsidiary owned by ONGC, has been aggressively pursuing solar, wind, and energy storage opportunities and is looking to push the country towards renewable energy transition through greenfield and brownfield acquisitions.

NTPC Green Energy, a part of NTPC Ltd, is also on the path of leading the company's expansion in renewable energy, with an ambition to reach 60 GW of renewable energy capacity by 2032. The transaction will strengthen ONGC as well as NTPC's larger plans to facilitate India's renewable energy growth.

The transaction also unites the most influential players, or stakeholders, of the renewable energy space. Government-related asset manager NIIF has heavily invested in the renewable energy space with a fund pool of USD 4.4 billion. British International Investment Plc (BII), the UK development finance institution, is committed to sustainable development in emerging markets, while Eversource Capital managing one of the largest climate funds in emerging markets has the thematic focus on energy transition, industrial decarbonization, and urban sustainability.

The CCI approval is one of the most significant milestones of the regulatory process, and the transaction is set to further consolidate the renewable energy space in India. Renewable energy capacity will be the single most significant driver for India's energy basket as part of India's transition towards climate change mitigation, and such transactions reflect the increasing optimism on the prospects of the industry.

With the takeover of Ayana by ONGPL, the firm strengthens its position in the renewable energy sector, a key stepping stone for India's transition towards energy transition. As operations in renewable energy gain pace nationwide, the takeover is a pointer to the giant investments being made to deliver sustainable energy to India and curb carbon emissions. A focus on solar, wind, and hybrid power solutions also gains momentum for India's mission to diversify the energy basket and make the most out of clean energy.

Indian government's shift in direction to create 500 GW of renewable power capacity by the year 2030 also marks the necessity of this type of investments and acquisition. With more interest in renewables by ONGPL, it is best-positioned to serve as an instrumental force towards situating the country to meet its clean energy and green growth target.