SoftBank, Bharti, Foxconn announce $20 bn solar project

SoftBank, Bharti, Foxconn announce $20 bn solar project

Japan's SoftBank Corp today announced investment of USD 20 billion in setting up solar power projects in India in partnership with telecom giant Bharti Enterprises and Taiwan's Foxconn.

The Japan headquartered telecommunications and Internet major, which had previously committed to invest USD 10 billion in India over a decade, said the three firms will set up 20 gigawatts of renewable energy projects in India.

SoftBank will hold majority stake in the joint venture, SBG Cleantech Ltd, while Bharti Enterprises Ltd and Foxconn Technology Group will have minority stakes.

Its CEO Masayoshi Son said Foxconn will help with planned solar equipment manufacturing for the projects.

The three firms are also looking at manufacturing equipment in India, he added.
"We have committed to invest USD 10 billion in 10 years. In past 9 months, we have already made a billion dollar investment," he said.

Bharti Chairman Sunil Mittal said Manoj Kohli will head the three-way venture as its executive chairman while Raman Nanda will be the chief executive officer.

India, Son said, has two times more sunshine and cost of constructing solar park is half that of Japan. It would take two years to start a project from the time of land allocation.

"With two times more sunshine and half cost of construction, making a solar part becomes four times more efficient. It makes business sense, economic sense and technological sense," he said.

 SBG Cleantech will be a harbinger of solar and wind energy in the country and intends to participate in the 2015-16 round of solar power plant tenders under the NSM and state-specific solar programmes.

Besides this project, Masayoshi Son said, Softbank is exploring the possibility of manufacturing solar panels in India, which gets abundant sunshine and the cost of constructing solar parks is half that of Japan.

"With two times more sunshine and half cost of construction, making a solar park becomes four times more efficient. It makes business sense, economic sense and technological sense," he said.

It would take two years to start the project from the time of land allocation, he said.
"We can manufacture solar equipments here in India. It will reduce one third logistics cost if we manufacture and assemble in India. With Foxconn participation we will also create some kind of manufacturing capacity here in India," he added.

The project is looking at significant amount of debt from Japanese financial institutions, which have endorsed the project, Mittal said.

Son said that a Japanese government related bank is "making strong participation" and other Japanese commercial bank have indicated that they will participate in this project fund.

"Bharti investment will be significant minority stake but it will depend upon debt to equity ratio that are being finalised. Massive debts are available for this project," Mittal said.

Bharti Enterprises, the parent company of India's biggest telecom company Bharti Airtel, had previously formed a 50:50 joint venture with SoftBank, Bharti SoftBank. It recently acquired 36.5 per cent stake in ScoopWhoop, an Indian-focused media startup.

Bharti SoftBank also owns Hike Messenger, an Indian app that allows users to exchange texts and images via the Internet on their smartphones.

In January, Hike bought US startup Zip Phone, which allows users to make and receive calls through the Internet. 

Softbank President Nikesh Arora said that for the project to be sustainable the power to be supplied through renewable energy should be better and cheaper than coal-generated power.

However, he added, in the short term there can be some gap in the rates of power supplied by the two sources.

He said SBG Cleantech will not need cultivable and irrigable land but will require unusable, barren land for setting up the facilities and does not see land acquisition an issue to obstruct the project.

Last year, SoftBank's Silicon Valley Internet investment arm, headed by Arora, agreed to invest USD 67 million in Jasper Infotech Pvt Ltd, an Indian e-commerce provider that runs online marketplace

SoftBank is also leading a group of investors putting USD 210 million into ANI Technologies Pvt Ltd's Ola Cabs, which operates a digital taxi-hailing service.

Son, who had predicted that e-commerce in India would become a USD 500 billion industry in the next 10 years, met Prime Minister Narendra Modi. He had met Modi in October last year as well.

SoftBank paid USD 200 million for a 35 per cent stake in InMobi, an Indian mobile-advertising network, starting in 2011.

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