Stonepeak in talks for AM Green stake as USD 20bn green deal takes shape in India

The US-based alternative investment firm, Stonepeak, is looking to undertake a 15 per cent stake in AM Green, the holding company of green energy, which is in advanced discussion now. With this, India is on the route to becoming one of the largest energy deals.

The base of the deal

It can be anticipated that the AM Green (Luxembourg) S.à r.l., sale stakes will be completed by next month. This capital boost will allow the firm to pay back USD 650 million in private credit. This was previously used to secure a 17.5 per cent stake in Greenko Energy Holdings from Japan’s Orix Corp, as part of a larger USD 7.5 billion deal.

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The deeds of the expansion plan

Besides the fund in private credit, the rest of the amount will be given for AM Green’s ambitious USD 20 billion capital expenditure program, which includes projects in biofuels, green aluminium and green ammonia.

As part of this plan, AM Green's subsidiary is working on the development of a primary aluminium smelter with a holding capacity of 1 MTPA, along with alumina refining operations.

In addition to this, the firm is also setting up facilities for green hydrogen, green ammonia and various decarbonisation solutions.

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Investors' rising scrutiny

Mitsui & Co. in Japan is diving into due diligence and has signed a memorandum of understanding (MoU) with AM Green. As a part of this, both firms will be exploring strategic collaboration and a potential investment. 

Terms offered to Stonepeak perfectly align with the ones that are being presented to Mitsui. This influx of capital highlights a strong global interest in India’s renewable energy transition efforts.

The acquiring firm is not new to India’s green energy scene, as it has previously invested in various renewable platforms. 

Despite facing challenges like the lack of power purchase agreements for some green capacity and issues with power curtailment, investor enthusiasm remains high, with reports indicating that India’s renewable energy sector is on a solid growth trajectory and drawing in substantial investment.

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