Indian Oil’s Terra Clean in talks to buy 50% stake in Fourth Partner Energy

Core Viewpoint - Indian Oil Corporation plans to acquire a 50% stake in Fourth Partner Energy Pvt. Ltd for approximately $400 million, marking its first venture into the green energy sector [1][2]. Company Overview - Indian Oil Corporation is the largest crude oil refiner in India, with a refining capacity of 70.25 million metric tonnes per annum, accounting for 31% of the country's total refining capacity [11]. - Fourth Partner Energy has 1.5GW of installed green energy capacity and aims to reach 3.5GW by 2025, with operations in multiple countries including Vietnam and Bangladesh [7]. Acquisition Details - The acquisition will involve a mix of primary and secondary share transactions, providing a partial exit for existing stakeholders, including the World Bank's IFC and Asian Development Bank [2]. - Terra Clean Ltd, a wholly owned subsidiary of Indian Oil, was established in May 2024 and plans to install 5.3GW of renewable energy capacity [3]. Market Context - The move aligns with a broader trend among state-run energy companies in India to invest in clean energy, as global oil companies also establish a presence in the sector [4]. - Indian Oil has plans to develop 31GW of renewable energy capacity by the end of the decade, with significant investments already made in Terra Clean [9]. Investment Landscape - Fourth Partner Energy has attracted significant investment, including a $275 million equity investment from IFC, ADB, and DEG in August of the previous year [8]. - The commercial and industrial (C&I) segment of the renewable energy market is gaining traction due to supportive regulatory frameworks, allowing large power users to source energy from the open market [12][13]. Industry Growth Projections - India has an installed renewable energy capacity of 245GW and aims to add 50GW annually to reach 500GW by 2030, with a long-term goal of 1,800GW by 2047 and 5,000GW by 2070 [14].