Malaysia’s Gentari plans minority stake sale in C&I assets to raise around $400 million

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NEW DELHI:New Delhi: Gentari Sdn Bhd, a unit of Malaysia’s state-run oil and gas company Petroliam Nasional Bhd (Petronas) that has been actively scouting for green energy assets in India, is now planning a minority fund raise in its proposed commercial and industrial (C&I) projects in an equity deal valued at around $400 million, two people aware of the development said.

This will involve a stake sale of up to 49% in its 3.5 gigawatt (GW) assets that will supply electricity to a unit of AM Green, set up by Mahesh Kolli and Anil Kumar Chalamalasetty, founders of Greenko Group. The unit will produce 5 million tonnes per annum (mtpa) of green ammonia that is equivalent to about 1 mtpa of green hydrogen. The power purchase agreement is for supplying 5 GW to AM Green Ammonia Holdings, in which Gentari is also investing $1.5 billion for 30% stake.

“The total PPA is for supplying 5 GW, for which construction has started for 3 GW. Gentari is looking for partners for the remaining capacity,” said one of the two people cited above, requesting anonymity.

India’s C&I segment has been attracting strong investor interest given the supportive regulatory landscape, with rules allowing large power users to source energy from the open market rather than the costlier grid. C&I projects are also shielded from risks such as curtailment of power procurement by state-run power distribution firms.

“The minority fund raise by Gentari is for developing renewable power capacity for captive supply to AM Green,” said the second person cited above, who also did not want to be named.

Global oil companies such as Shell Plc, France’s TotalEnergies, Thailand’s PTT Group and Petronas through Gentari have already established a presence in India’s green energy sector, as the conventional hydrocarbon space undergoes a massive disruption with increasing focus on green hydrogen and energy storage. Petronas set up Gentari in June 2022 to accelerate the adoption of clean energy and build a renewable energy capacity of 40GW, supplying 1.2 million tonnes per annum of green hydrogen and setting up electric vehicle (EV) charging points across the Asia-Pacific, with a focus on Malaysia and India.

A Petronas spokesperson in an emailed response said, “We have nothing to add on the matter.”

Gentari has been actively engaged in India’s green energy transition. It has emerged as the winning bidder for the Indian solar projects of Finland’s Fortum Oyj, totalling 185MW for the deal having an enterprise value of around $200 million and an equity value of around $150 million. It has also announced its equal joint venture (JV) with ReNew Energy Global Plc to develop 5 GW capacity, wherein Gentari Renewables India Pte. Ltd will have a 50% equity stake in Nasdaq-listed ReNew’s utility scale 5 GW renewable energy portfolio comprising of solar, wind and energy storage projects. 

Gentari was earlier also in the fray to buy solar projects totalling 350 megawatts (MW) from O2 Power, with Sekura Energy Ltd, an energy sector focused platform of Edelweiss Infrastructure Yield Plus Fund finally emerging as the front-runner.

India’s C&I sector has seen sustained investor interest and deal activity, as reported by Mint earlier. Recently, Noida-headquartered INOXGFL Group decided to sell a majority stake in its C&I business, and has mandated EY with running the sale process for the deal having a potential equity value of around $200 million. Also, Serentica Renewables, promoted by Sterlite Power, is planning to sell a minority stake to raise around $300 million and to appoint a sell-side banker to run the process. 

Also, EverSource Capital-backed Radiance Renewables Pvt. Ltd has given a formal mandate to Rothschild & Co. for the sale of the C&I platform, and there is significant interest to acquire Macquarie Asset Management’s Green Investment Group platform Vibrant Energy that has a 1.5 GW C&I portfolio.

Besides, Sanjeev Aggarwal, founder and chairman, Hexa Climate Solutions, along with I Squared Capital has set up Hexa Climate Solutions, wherein the New York-based private equity fund will invest around $500 million in the company that will cater to C&I sector.

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Published: 13 Jun 2024, 07:15 AM IST

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