Whalesbook
Stonepeak, the US-based alternative investment firm, is in advanced discussions to acquire up to a 15% stake in AM Green, the holding company of green energy firm AM Green, in a deal valued at approximately $1.4 billion. The transaction is poised to become one of India's largest green energy deals.
Deal Dynamics
The stake sale in AM Green (Luxembourg) S.à r.l. is anticipated to conclude within the next month. This significant capital infusion will see AM Green repay $650 million in private credit, which was previously used to acquire a 17.5% stake in Greenko Energy Holdings from Japan's Orix Corp for $7.5 billion.
AM Green's Expansion Plans
The remaining funds will bolster AM Green's ambitious $20 billion capital expenditure strategy. This includes projects in biofuels, green aluminum, and green ammonia. AM Green's subsidiary is developing a 1 million tonnes per annum primary aluminum smelter and associated alumina refining operations, alongside facilities for green hydrogen, green ammonia, and other decarbonization solutions.
Investor Interest Intensifies
Japan's Mitsui & Co. is also conducting due diligence and has signed a memorandum of understanding (MoU) with AM Green for strategic collaboration and potential investment. The terms offered to Stonepeak are reportedly aligned with those presented to Mitsui. This influx of investment highlights strong global appetite for India's renewable energy transition initiatives.
Stonepeak is not a new entrant to India's green energy market, having previously invested in other renewable platforms. The sustained investor interest comes despite challenges such as the lack of power purchase agreements for some green capacity and power curtailment issues. Reports indicate India's renewable energy sector is witnessing significant growth, attracting substantial investment.