In June 2015, SoftBank Group Corp CEO Masayoshi Son made an announcement that sent tremors through India’s clean energy sector. Speaking at a news conference in New Delhi, Son declared that the Japanese conglomerate would lead a $20 billion investment to build 20 gigawatt ( GW GW GW 1 GW = 1,000 MW ) of solar energy capacity in India. India’s total solar capacity at the time? 3 GW.
It wouldn’t be a stretch to say that Indian clean energy producers felt like they were facing a firing squad. They hadn’t yet seen a competitor with such outsized ambitions backed by a seemingly bottomless well of funds. And while the Vision Fund—SoftBank’s $100 billion tech investment vehicle–was still a few years down the road, the Japanese behemoth had already made its mark in India. In 2014, it had deployed almost $1 billion across three startups—e-commerce contender Snapdeal, Uber rival Ola, and real estate platform Housing.com.
Like a hammer crashing down, SoftBank’s impact on India’s solar space seemed inevitable. The only uncertainty was how much damage it would do. Indeed, India was meant to be the launchpad for SoftBank’s global clean energy expansion, which had taken shape in Japan in the aftermath of the 2011 Fukushima nuclear disaster. But that never quite came to pass.
In less than six years, SoftBank’s renewable energy plans in India have come apart spectacularly.
The company has reportedly reportedly The Economic Times CPPIB to acquire SoftBank’s 80% in SB Energy for $425 million Read more sold its 80% stake in the joint venture it formed for the business with Sunil Mittal-owned Bharti Enterprises to the Canadian Pension Plan Investment Board (CPPIB). While SoftBank has invested $800 million in SB Energy Holdings, the London-registered JV, the sale is said to have fetched it just $425 million, with another $100 million tied to future outcomes. Two people aware of the development confirmed the stake sale and said it’s only a matter of time before it is announced. And one of them also said SoftBank is, in fact, exiting the JV at a loss.
“SoftBank is not a hold-to-maturity player. Still, if they had decided to wait till completing a few more projects, they would have sold at a higher valuation,” says a former senior executive with SB Energy.
SoftBank was undone by a plethora of problems. Its issues ranged from rapidly falling solar tariffs, persistent regulatory challenges, and a higher cost of project development, according to The Ken’s conversations with former employees and competitors. They requested anonymity since they did not want to be seen talking about their erstwhile employer or rival.
“When they entered India, they never thought solar tariffs would go below Rs 2.50 ($0.034) per unit,” says another former executive with SB Energy, who was with the company till recently.