SoftBank and Foxconn bet billions on solar power in India
13.08.2015 - by Admin
One of the priorities of New Delhi is planning to increase 5 times the power output of solar energy to 100 GW by 2022, providing access to electricity to about 300 million people are not connected to the grid.
The Indian government said that Mr. Masayoshi Son, president of SoftBank pledged to invest $ 10 billion in India in the coming years, meeting with Prime Minister Narendra Modi in October last year. The following day, SoftBank invested more than $ 800 million in two top Indian startup.
Chairman of Bharti Enterprises Sunil Bharti Mittal, center, CEO of SoftBank, Masayoshi Son, right, and President and Chief Operating Officer of SoftBank Corp Nikesh Arora, left, shake hands before a news conference in New Delhi, June 22, 2015.
India, known for its high reliance on fossil fuels and frequent power cuts, received a ray of sunshine Monday when Bharti Enterprises Ltd., Foxconn Technology, and SoftBank Corp. announced they had formed a three-way joint venture to tap growing demand for cheap electricity using renewable energy sources in the South Asian country.
The venture, SBG Cleantech Ltd., plans to generate about 20 gigawatts of electricity in India, which would translate to around $20 billion worth of investments in solar and wind power.
It comes as India aims to ramp up its power-generating capacity by 50% to provide continuous electricity to its more than 1.2 billion citizens by 2019.
Workers are finishing the solar panels at solar parks Gujarat, Charanka village, Patan town, from Ahmedabad – India 250km.
As part of the initiative, New Delhi plans a five-fold increase in electricity generation using solar power to 100 gigawatts by 2022, to provide access to electricity to about 300 million people who aren’t connected to the power grid.
The solar-power generation plans are also aimed at cutting India’s reliance on fossil fuels. India’s imports of oil, gas and coal have ballooned in recent years, contributing to a trade deficit that has shaken international confidence in the country’s economic future. But, the recent decline in prices of crude oil, and the government’s increased focus on alternative energies have provided some respite.
India has made little progress in its solar power targets. The country’s total solar-installed capacity crossed 4 gigawatts at the end of May, according to government data, a small percentage of the total 255 gigawatts capacity, generated mostly from coal.
The government hopes that improving power supplies across the country, especially in rural India, will spur economic growth. Connecting homes to renewable energy sources takes less time than wiring villages up to the grid of a traditional power plant situated miles away. This is because solar and wind energy is consumed at the same place it is generated, reducing transmission costs and energy losses from transportation.
For Foxconn, the venture would mean an expansion into making solar panels and other equipment. This comes as the Taiwanese company, which makes iPhones and iPads for Apple, looks at expanding its business interests because of lower sales growth and decline in profits, as well as a tax crackdown in China.
Solar panels are relatively easy to manufacture and require sand, something India has a lot of.
For SoftBank, a firm that invests in Internet and telecommunications technologies, the solar foray gives it an opportunity to explore manufacturing and expand its business interests.
The Indian government said that Mr. Masayoshi Son, SoftBank’s chairman, pledged to invest $10 billion in India in the coming years when he met Prime Minister Narendra Modi in October. A day later, SoftBank invested more than $800 million in two of India’s leading start-ups–Jasper Infotech Pvt. Ltd., that owns Snapdeal.com, and ANI Technologies Pvt. Ltd., that operates Ola, a taxi-hailing service similar to that of Uber Technologies Inc.
The solar venture would also mark an expansion into new businesses for Bharti Enterprises Ltd., the parent company of Bharti Airtel, India’s biggest telecommunications company by sales and users.
SBG Cleantech will be led by Bharti’s founder-chairman Sunil Mittal’s right hand man, Manoj Kohli, who will be chairman. A veteran at Bharti, Mr. Kohli led Bharti Airtel’s international expansions into Sri Lanka, Bangladesh and Africa, as the chief executive of its telecommunications unit. He took the company to become the biggest operator in India with over 140 million users from about a million when he took charge. In his previous role, he was the managing director of the company.
Other global firms are also betting on India’s solar sector, because it offers long-term contracts and a continuous source of income for investors.
Earlier this month, SunEdison’s top executive in Asia said the company plans to invest $15 billion to generate 15GW of electricity from both solar and wind farms. This is in addition to a plan to set-up a $4 billion factory to make solar panels through an equal joint-venture with Adani Enterprises.
Source: Tri Thuc Tre
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