The joint venture between Oil and Natural Gas Corporation (ONGC) and NTPC Green, known as ONGPL, is making waves with its planned acquisition of Ayana Renewable Power for a hefty $700-750 million. This bold move isn’t just a corporate shuffle; it’s a clear signal of India’s serious commitment to ramping up its renewable energy sector. With the country’s ambitious climate goals under the Paris Agreement, this acquisition is a strategic play that aims to bolster India’s green energy landscape.
Ongpl has nearly wrapped up negotiations to take full ownership of Ayana Renewable Power, which boasts an impressive portfolio of 4.6 gigawatts (GW) of renewable energy assets, including solar, wind, and storage projects. Currently, Ayana operates 1.6 GW and is on track to add another 2.5 GW by the end of the next fiscal year. This acquisition is a significant step for ONGC, a state-run oil and gas giant that has spent over two decades building its fossil fuel empire globally. By partnering with NTPC Green, ONGC is not just looking to diversify; it’s making a strategic pivot toward sustainability.
The existing shareholders of Ayana—National Investment and Infrastructure Fund (NIIF), British International Investment (BII), and EverSource Capital—are set to exit the scene, cashing in on their stakes as the enterprise value of Ayana is pegged at a whopping $1.7-1.8 billion. This speaks volumes about the company’s role in India’s burgeoning renewable energy market. The deal not only provides a lucrative exit for these private equity investors but also sets the stage for future renewable energy transactions, especially as global investors are increasingly eyeing the green energy transition.
For ONGC and NTPC Green, this acquisition is more than just a financial maneuver; it’s a chance to solidify their positions in a sector that is rapidly gaining traction. With a target of achieving a 10 GW renewable energy portfolio by 2030, this acquisition is crucial for ONGC’s green energy strategy. NTPC Green, a subsidiary of NTPC Ltd.—India’s largest power utility—has already been making strides in expanding its renewable capacity, and this acquisition will only accelerate that momentum.
Financially, the $750 million investment is a testament to the growing significance of public-private partnerships in India’s renewable energy landscape. The expertise of NTPC in power generation combined with ONGC’s infrastructure and financial capabilities creates a robust framework for success. Ayana’s reported profit of ₹46 crore on an operating income of ₹856 crore for FY 2023-24 indicates its viability and potential for future growth, a promising sign for investors looking to tap into India’s renewable energy market.
As the world leans more toward sustainable energy solutions, this acquisition positions India at the forefront of the global green energy transition. The ONGC-NTPC Green partnership not only exemplifies the potential of collaboration between government-owned entities and private investors but also underscores the importance of strategic investments in achieving large-scale renewable energy targets. This deal could very well be a blueprint for future ventures, paving the way for a cleaner, greener future in India’s energy sector.
