Greenforest New Energies Bidco Limited — Combination C-2022/06/935

COMPETITION COMMISSION OF INDIA 25th July 2022 Notice under Section 6(2) of the Competition Act, 2002 given by Greenforest New Energies Bidco Limited, BlackRock Alternatives Management, LLC, One Hundred Twenty Second Investment Company-Sole Proprietorship LLC and Tata Power Renewable Energy Limited CORAM: Mr. Ashok Kumar Gupta Chairperson Ms. Sangeeta Verma Member Mr. Bhagwant Singh Bishnoi Member Order under Section 31(1) of the Competition Act, 2002 1. On 3rd June 2022, the Competition Commission of India (Commission) received a notice (Notice) under Section 6(2) of the Competition Act, 2002 (Act), given by Greenforest New Energies Bidco Limited (Greenforest), BlackRock Alternatives Management, LLC (BAM), One Hundred Twenty Second Investment Company-Sole Proprietorship LLC (OHTIC) and Tata Power Renewable Energy Limited (TPREL). The Notice was given pursuant to the execution of, inter alia, the Shareholders Agreement between Greenforest, TPREL and Tata Power Company Limited (TPCL/Tata Power) on 14th April 2022 (SHA); a Share Subscription Agreement between Greenforest, TPREL and TPCL on 14th April 2022 (SSA); an Equity Commitment Letter issued by GEPIF III (GenPar) LLC (GenPar) to Greenforest and TPREL on 14th April 2022; and Master Subscription Agreement between BlackRock Inc. (BlackRock) and Mubadala Investment Company PJSC (MIC).

2. The Commission, vide its communication dated 21st June 2022 (21st June Communication), issued under Regulation 14(3) of the Competition Commission of India (Procedure in regard to transaction of business relating to combinations) Regulations, 2011, required the notifying party to remove defects in the Notice and furnish certain information relevant for the purpose of assessment of the Proposed Combination. The notifying party submitted its response vide submission dated 1st July 2022. A voluntary submission has also been made by the Notifying Party on 13th July 2022 (Voluntary Submission). In response to 21st June Communication, BAM and OHTIC also have become notifying parties by furnishing relevant documents. With regard to interconnected transaction, wherein TPREL is the acquirer in relation to internal reorganization, it has also been made a notifying party to the Proposed Combination through the Voluntary Submission.

3. The Proposed Combination envisages internal reorganization of TPREL and acquisition of up to 11.43% of the equity share capital of TPREL by way of subscription of equity shares and compulsorily convertible preference shares (CCPS) of TPREL (in two tranches) by Greenforest.

4. Greenforest proposes to acquire certain number of equity shares of TPREL on the date of closing such as will entitle Greenforest to hold part of the equity share capital of TPREL (on a fully diluted basis) (Equity Shares Acquisition). In addition to the Equity Shares Acquisition, Greenforest also proposes to acquire certain compulsorily convertible preference shares (CCPS Acquisition) of TPREL. The proposed Equity Shares Acquisition and CCPS Acquisition will result in Greenforest acquiring up to 11.43% of the equity share capital of TPREL.

5. Inter-Connected Transaction: Prior to Greenforest’s investment in TPREL, TPREL (directly or through its subsidiaries) proposes to acquire from its parent entity Tata Power Company Limited:

a. 100% of the equity share capital of Tata Power Green Energy Limited (TP Green), TP Saurya Limited (TP Saurya), Tata Power Solar Systems Limited (TPSSL), Supa Windfarm Limited (SWL), TP Roofurja Renewable Limited (TPRRL), TP Solapur Saurya Limited (TP Solapur Saurya) (subsidiaries of Tata Power Company Limited (TPCL));

b. 74% of the equity share capital of TTP Kirnali Solar Limited (TPKL), TP Akkalkot Renewable Limited (TPARL) and TP Solapur Solar Limited (TP Solapur); and c. TPCL’s rooftop solar power generation, Nivade wind power plant and Visapur wind power projects and EV charger business (EV Business)

(a, b and c above are collectively proposed Internal Reorganisation).

6. TPREL, TP Green, TP Saurya, TPSSL, TPKL, TPARL, SWL, TPRRL, TP Solapur Saurya, TP Solapur, TPCL’s rooftop solar business, Nivade wind power plant, Visapur wind power projects and the EV Business are collectively hereinafter referred to as Target Business. The Internal Reorganisation is inter-connected with the Proposed Combination within the meaning of Regulations 9(4) and 9(5) of the Competition Commission of India (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011 (Combination Regulations).

7. Greenforest is an investment vehicle jointly indirectly incorporated by BlackRock Alternatives Management, LLC (in its capacity as investment manager for Global Energy and Power Infrastructure Fund III) and MIC for undertaking the Proposed Combination.

8. BAM is an indirectly wholly owned subsidiary of BlackRock. BlackRock is a U.S. publicly traded company active in the provision of global investment management, risk management and advisory services to institutional and retail clients. It manages assets on behalf of institutional and individual investors worldwide.

9. MIC is an investment vehicle of the Government of Abu Dhabi and manages investment and development across a variety of industries. It has investments in a wide range of sectors, including energy, utilities and real estate. MIC holds shares in Greenforest through its affiliate OHTIC.

10. TPREL is a wholly owned subsidiary of TPCL, through which TPCL undertakes its renewable energy business. TPREL’s primary business is the generation of power through renewable sources of energy. A brief description of the business activities undertaken by the Target Business1 in India, is set out below:

a. Developing, constructing and operating renewable energy plants (including, solar, wind, storage, hybrid, round-the-clock, peak power supply); b. Power generation through renewable sources (solar and wind energy); c. Provision of EPC services for the construction, operation and maintenance of solar energy plants; d. Manufacture of solar modules, solar cells, solar water pump systems and other products required for construction and operation of solar energy plants; e. Electric Vehicle charging infrastructure business; and f. Provision of EPC services for the construction, operation and maintenance of solar rooftop and solar pump systems.

11. It has been submitted that there are no direct horizontal overlaps between Greenforest, BlackRock and MIC vis-à-vis the Target Business. However BlackRock, through Fluor Corporation (Fluor), is engaged in the provision of EPC services to the entities engaged in 1Tata Power Green Energy Limited (TP Green), TP Saurya Limited (TP Saurya), Tata Power Solar Systems Limited (TPSSL), TP Kirnali Solar Limited (TPKL), TP Akkalkot Renewable Limited (TPARL), Supa Windfarm Limited (SWL), TP Roofurja Renewable Limited (TPRRL), TP Solapur Saurya Limited (TP Solapur Saurya), TP Solapur Solar Limited (TP Solapur) (subsidiaries of Tata Power Company Limited (TPCL)

the solar sector in India; and MIC through Hero Future Energies Private Limited (HFE) is engaged in the business of generation of power through renewable energy sources (in particular solar and wind energy).

12. Based on the business activities of Fluor and HFE, the parties exhibit overlap in the following segments:

a. Provision of EPC services to entities that operate in the solar energy sector in India (EPC Solar Market); b. Market for generation of power in India (at the broader level) (Power Generation Market); c. Market for generation of power through renewable sources in India (at the narrower level) (Renewable Energy Segment); d. Market for generation of power through solar energy in India (at the narrowest level) (Solar Energy Segment); and e. Market for generation of power through wind energy in India (at the narrowest level) (Wind Energy Segment); f. The Power Generation Market, the Renewable Energy Segment, the Solar Energy Segment and the Wind Energy Segment are collectively referred to as the Power Generation Markets.

13. It has been submitted that Fluor’s presence in the EPC Solar Market in India is limited to a Greenfield plant that it constructed for Lanco in 2014. Fluor’s overall revenue in India (earned through its subsidiary Fluor Daniel India Private Limited (FDIPL)) was between INR 500 crore and INR 1000 crore in FY 2020–21. The EPC Solar Market is characterised by the presence of several competitors, such as Sterling and Wilson Renewable Energy Ltd. (SWREL), L&T, Mahindra Susten, Vikram Solar and Rays Power Infra.

14. The combined market share of HFE and the Target Business in terms of volume in the Power Generation Market, Renewable Energy Segment, Solar Energy Segment and Wind Energy Segment are in the range of [0–5%], [0–5%], [0–10]% and [0–5]% respectively. Furthermore, each segment of the Power Generation Markets is characterized by the presence of several competitors. Some of the competitors in the Solar Energy Segment and the Renewable Energy Segment are ReNew Power Ltd, Adani Green Energy, Acme Solar Holdings Ltd., Azure Power Global Ltd. and NTPC. The competitors in the Wind Energy Segment include Renew, Sembcorp, Greenko, Mytrah and CLP India.

15. Vertical Overlap 1: With regard to vertical overlaps, TPREL (including its subsidiaries) can potentially avail the EPC services provided by Fluor to develop and construct the plants required by TPREL for generating solar power. Therefore, the upstream market can be defined as EPC Solar Market and downstream market as Solar Energy Segment. As Fluor has a limited presence in India in the EPC Solar Market, it would not have the ability to foreclose inputs in the downstream Solar Energy Segment with such limited market presence. Furthermore, the downstream Solar Energy Segment is competitive and characterised by the presence of a number of competitors.

16. Vertical Overlap 2: The solar modules sold by TPREL in India can be potentially purchased by HFE, which can be used as an input in its facilities for the generation of solar energy by HFE. Thus, the upstream market can be defined as Solar Modules Market and downstream market as Solar Energy Segment. The market share of the Target Business in the upstream market is less than 10% based on volume and is characterised by the presence of competitors such as Waree, Adani, Vikram Solar and Emmvee Energies, etc., which are engaged in the supply of solar modules in India.

17. Vertical Overlap 3: The solar modules supplied by TPREL can be purchased by Fluor as a part of its EPC services provided to entities operating in the solar power generation sector. Thus, the upstream market can be termed as the Solar Module Market and downstream market as EPC Solar Market. However, given the limited market shares and presence of competitors in the upstream and downstream markets, the proposed combination is not likely to cause any foreclosure concern.

18. Considering the facts on record, including details provided in the Notice given under Section 6(2) of the Act and assessment of the Proposed Combination based on the factors stated in Section 20(4) of the Act, the Commission is of the opinion that the Proposed Combination is not likely to have any appreciable adverse effect on competition in India in any of the relevant market(s), and therefore, the Commission hereby approves the same under Section 31(1) of the Act.

19. This order may be revoked if, at any time, the information provided by the notifying parties is found to be incorrect.

20. The information provided by the notifying parties is confidential at this stage in terms of and subject to the provisions of Section 57 of the Act.

21. The Secretary is directed to communicate to the notifying parties accordingly.