SoftBank to invest up to US$100 billion in Indian solar projects

SoftBank Group, a Japanese conglomerate, is reportedly in advanced talks with the Indian government regarding an investment in solar projects in the country of between US$60 and 100 billion.

This financing is expected to come from the company's Vision Fund, which was set up with the help of the government of Saudi Arabia, the fund's largest investor, earlier this year.

Investments will be made in both solar power generation and the solar value chain, for example in the development and production of solar panels. 

Though not yet confirmed by SoftBank or the Indian government, this investment is very much in keeping with the company's recent activity. In April this year, SoftBank announced that it had entered into a Memorandum of Understanding (MoU) with GCL-Poly Energy Holdings Limited to set up an integrated solar photovoltaic (PV) manufacturing facility in Andhra Pradesh, a state in the south-east of India, through a joint venture company (JVC).

According to the MoU, SoftBank will hold 60% outstanding shares of the JVC while GCL-Poly will hold 40%. The companies have agreed to invest over US$900 million in the venture

Furthermore, in March, SoftBank signed an MoU with the Public Investment Fund of Saudi Arabia (PIF) via its Vision Fund to develop between 150 GW and 200 GW solar power generation capacity in the country by 2030. The agreement includes US$1 billion investment in two solar projects with 3 GW and 4.2 GW capacity, to be commissioned by 2019.

It also commits SoftBank to investing in the solar value chain, with the aim of developing a solar manufacturing ecosystem and localizing a significant portion of the renewable energy value chain in the Saudi economy.

Thus, the soon-to-be-announced agreement with the Indian government is very similar in scope, demonstrating SoftBank's eagerness to invest in the solar energy sectors of emerging economies. 

India has set a target to achieve an operational solar power capacity of 100 GW by 2022. So far this year, the government have endeavoured to meet this target through launching tenders for an extraordinary amount of solar generation capacity. Although initially successful, developers' demand seems to have waned, with many tender deadlines being extended or in some cases tenders cancelled altogether.

Therefore, this agreement may represent a change of direction by the government in achieving this ambitious target.