Reliance's green energy division may generate 10% of EBITDA in 5 years

Reliance's green energy division may generate 10% of EBITDA in 5 years

Indian multinational conglomerate, Reliance Industries Ltd. has announced multiple collaborations with REC, Sterling and Wilson, NexWafe, and Ambri for approximately USD 1.2 billion.

The move comes on the back of RIL seeking to streamline its green energy business, including investments in solar, hydrogen, and battery technology. As a result, the company could subsidize almost 10% of the its pre-tax returns in five years.

According to reports, Reliance has acquired the proficiency and technology portfolio with this investment to develop a completely integrated end-to-end renewable energy environment via solar, batteries, and hydrogen.

Reliance will deploy the acquired technologies and establish manufacturing plants in India. Also, the firm is estimated to continue investing in technology such as fuel cells and key materials for the clean energy sector.

Based on assumptions, it is believed that the new energy business could subsidize around 10% of the company's total EBITDA by FY'26, imagining that all the plants are built and ramped up on the company's timeline.

This will aid the firm to be a highly varied conglomerate spanning E&P, petrochemicals, refining, telecoms, retail, clean energy, and the internet.

However, the sources estimate that the firm will be fragmented, given to the incompetence of such a corporate structure.

By 2030, Reliance plans to produce 100 GW of solar power and green hydrogen at the cost of USD 1 per kilogramme. It plans to invest USD 10 billion in new energy business over the next three years to meet these goals.

The source said they envision a road to Reliance establishing a clean energy company of USD 36 billion based on CAPEX for clean energy.

Reliance is developing a green energy industry to offer equipment required for India's green energy transformation.

In addition, the company has pledged to become carbon-neutral by 2035, which is a year ahead of schedule for any other energy provider in the country.

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