Alternative investment firm KKR said Tuesday it has signed an agreement to invest $400 million in Serentica Renewables, a decarbonization platform under Vedanta Group that seeks to enable energy transition by providing clean energy solutions for energy-intensive industries.
This comes weeks after KKR struck a deal to co-invest $450 million in Hero Future Energies, the renewable energy arm of the Hero Group, along with the Indian conglomerate.
Serentica looks to provide renewable energy services through long-term power purchase agreements. Currently, the company has entered into three long-term PPAs and is in the process of developing around 1,500 MW of solar and wind power projects across various states including Karnataka, Rajasthan, and Maharashtra.
Serentica’s medium-term goal is to install 5,000 MW of carbon-free generation capacity coupled with different storage technologies and supply over 16 billion units of clean energy annually and displace 20 million tonnes of carbon dioxide emissions.
Pratik Agarwal, Director of Serentica Renewables, said, “This investment will allow us to leap ahead in our vision of decarbonizing large energy intensive industries and help in reversing climate change. This transaction is amongst the largest industrial decarbonization investments in India to date and carries forward the global decarbonization agenda which is centre stage at COP27 (2022 United Nations Climate Change Conference).”
Serentica was established earlier this year and is currently wholly owned by Vedanta Group.
Hardik Shah, Partner at KKR, said, “Our investment in Serentica reflects KKR’s confidence in India’s renewables sector and our commitment to advancing the energy transition in India. Energy-intensive, heavy-industry companies play an important role in society but have traditionally faced more challenges in meeting energy needs sustainably.”
Standard Chartered Bank acted as the sole financial advisor to Serentica for this transaction.
KKR is routing this investment from its Asia Pacific Infrastructure strategy. The transaction in Serentica marks KKR’s latest investment in India and the renewables sector.
Since 2011, KKR has deployed over $15 billion in equity globally to invest in renewable assets, which have an operational power generation capacity of 23 GW as of December 31, 2021. In Asia Pacific, KKR sees renewables as core to its infrastructure strategy and seeks to invest behind the significant opportunities across the region.
In 2020, KKR set up Virescent Infrastructure, a renewable energy platform to own and operate renewable assets in India. In 2022, KKR launched Aster Renewable Energy, a renewables platform to develop, build and operate solar, wind, and energy storage projects in Taiwan and Vietnam, with a view to expand to other markets across the region.
In August, KKR rolled out a $520-million infrastructure investment vehicle in India for roads.