Mitsui to invest in India’s mini-grid firm OMC Power
NEW DELHI: In perhaps the first such deal in India’s mini-grid space, Japan’s Mitsui & Co will acquire a stake in OMC Power Pvt Ltd, said two people aware of the development.
The 1 billion Japanese Yen investment is also a first by Japan’s largest corporates in India’s renewable energy sector, that plans to leverage OMC in other geographies of Asia and Africa. Mint couldn’t ascertain the size of Mitsui’s stake in OMC.
Mitsui has been present in India in sectors such as steel, agri-processing and pharma.
OMC, formerly known as Omnigrid Micropower Co Pvt Ltd was set up in 2011 and supplies electricity to telecom towers apart from operating solar power plants in rural areas and distributing the generated electricity through mini-grids.
Spokespersons for Mitsui & Co and OMC Power in separate emailed responses confirmed the development and said, “Mitsui will acquire shares in OMC as a strategic investor but we cannot disclose the actual percentage.”
“Mitsui will invest around 1 Billion Japanese Yen in OMC,” the spokespersons added.
Given that large solar projects are facing uncertainties with some states looking to renege on their offtake commitments for projects awarded at a comparatively higher tariff, there is a growing interest in the Indian solar off-grid energy segment. For instance, French energy company Engie SA which is in talks with Delhi-based Applied Solar Technologies (AST) for a partnership to provide off-grid power to the telecom and banking sectors, Mint reported on 25 August.
“OMC is one of the largest mini grid supplier to the telecom towers. Japanese investments have traditionally been low risk and seek modest yields over time,” said a person aware of the development requesting anonymity.
India can potentially generate 750 gigawatt (GW) solar power with an average solar radiation range of 4-7 per kilowatt-hour (kWh). Another person who also didn’t wish to be identified said, “The deal has been inked with Mitsui India.”
Mitsui’s investment follows JERA Co Inc, an equal joint venture between Japan’s largest utility Tokyo Electric Power Co. and Chubu Electric Power Co acquiring a 10% stake in ReNew Power Ventures Pvt. Ltd for $200 million in February.