Energy

PTT Group joins several other companies to buy a 22% stake in Avaada Energy

Summary

PTT Public Company Limited, a state-owned gas, and oil company based in Bangkok, are among companies eyeing a 22% equity stake in Indian electric utility giant Avaada Energy Pvt. Ltd. The Mumbai-based company unveiled a $200 million renewable energy project […]

PTT Public Company Limited, a state-owned gas, and oil company based in Bangkok, are among companies eyeing a 22% equity stake in Indian electric utility giant Avaada Energy Pvt. Ltd. The Mumbai-based company unveiled a $200 million renewable energy project to expand its current portfolio. Vineet Mittal, an Indian serial entrepreneur, has supported Avaada Energy in several capacities in its zeal to revolutionize the green energy sector in India. Currently, the company prides itself on a 1.2GW portfolio. It also has several ongoing projects with an estimated capacity of 4GW.

According to a source close to PTT, they will evaluate Avaada Energy’s eligibility, after which they will sign the equity deal. “The ongoing vendor due diligence (VDD) for Avaada Energy will be completed by February, post which a term-sheet with the selected firms will be signed. The plan is to have a binding sheet by March-end, “said the anonymous source. “PTT is now considering investing in renewable energy on many projects in targeted countries, including India. We are still not able to disclose any further information about the project’s understudy,” stated PTT spokesperson via email.

In September last year, Avaada Energy appointed Bank of America (BofA) to take charge of the stake sale process to raise about $200 million for clean energy developments. However, the Covid-19 pandemic struck, leaving no choice but to halt the sale process until travel restrictions were lifted. PTT also plans to buy a stake from ReNew Power, an alternative energy company supported by American investor Goldman Sachs.

Oil and gas companies have embraced the shift to clean energy, as seen through the PTT and Avaada deal. In 2019, Petroliam Nasional Bhd, a Malaysian public oil company, acquired Amplus Energy Solutions, an Indian Solar energy company, which confirms the formers growing interest in clean energy. The Malaysian company is also eyeing 10% of Tata Power Renewable Energy Ltd stakes.

Indian green energy companies have received attention from gas and oil companies from Europe and Russia. For Instance, Adani Green Energy Ltd signed a deal with French oil company Total. Norwegian Statoil ASA, Italian Eni SpA, and Netherland-based Shell Plc. are among the European companies investing in India’s renewable sector.

The growing demand for reliable electric power in India has influenced the growth of the clean energy sector. The total electricity consumed annually in India is approximately 189.6 GW, which cannot be met by the traditional electricity grid alone. The government is working on policies to remove barriers in licensing and distributing alternative energy to augment conventional energy sources.