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Rediff News  All News  » Business » Suzlon arm to spend $5 bn on green energy

Suzlon arm to spend $5 bn on green energy

September 26, 2008 11:55 IST

Suzlon Energy Chairman and Managing Director Tulsi Tanti announced the company's plan at the 2008 Clinton Global Initiative of former US President Bill Clinton in New York, said a press statement issued by Suzlon.

Of the total project value of $5-billion, Suzlon Green Power will provide approximately $1.5 billion in equity. Suzlon Green Power will acquire existing green power assets and greenfield power projects.

"Suzlon Green Power's business model will offer us an asset-based, long-term annuity income while mitigating the twin challenges of global warming and climate change. It also adds greater vertical integration to our holdings, building the value of our businesses in the long term," said Tulsi Tanti.

The company estimates that its projects will create 1,000 jobs directly and many times more indirectly and will reduce 7 million tonnes of carbon dioxide emission each year.

Meanwhile, Suzlon has announced to raise Rs 1,800 crore (Rs 18 billion) from a rights issue to complete the acquisition of the stake held by Portugal's real estate group Martifer in Suzlon subsidiary REpower Systems.

A board meeting of Suzlon Energy, scheduled for September 27, will consider a rights issue of equity shares to raise Rs 1,800 crore, the company informed the Bombay Stock Exchange. The company already has approval from the shareholders to raise Rs 5,000 crore through issue of foreign currency convertible bonds, global depository receipts or other securities.

Earlier this month, Suzlon had acquired a 22.48 per cent stake held by Portugal's Martifer in REpower Systems of Germany for Rs 1,744 crore (Rs 17.44 billion) to raise its stake in the German company to 90 per cent.

Sources said the funds would be utilised by Suzlon to complete the transaction with Martifer.

"Our board will meet next week and decide it," said a Suzlon spokesperson.

Bs Reporter in Mumbai