DELHI/MUMBAI -- Japan's SoftBank has formed a joint venture with India's Bharti Enterprises and Taiwan's Foxconn Technology Group to develop wind and solar energy capacity in India, a country desperate to reduce its dependency on fossil fuels.
SoftBank is leading the joint venture with Bharti and Foxconn taking minority stakes. The joint venture company, SBG Cleantech, is undertaking a 20-gigawatt solar power project costing $20 billion.
This is the first foray by Bharti into the renewable energy sector, away from its usual telecoms and retail. Telecoms and Internet giant SoftBank, by contrast, has built 16 solar plants in Japan since March 2011.
"I have enough knowledge and experience in this sector," SoftBank Chief Executive Officer Masayoshi Son told reporters. "India has two times more sunshine than Japan." With the costs involved in setting up a project half those in Japan, Son reasoned that it is "four times more efficient to create solar park[s] in India".
Sunil Bharti Mittal, Bharti's founder and chief executive officer, said SBG Cleantech was considering the western state of Rajasthan or Andhra Pradesh in the south for location.
Most of the land being considered is either not irrigated or desert, and Mittal said he did not foresee a problem with regard to the "land acquisition bill". Work is due to start in 18 months, and expected to take 10 years.
In the long run, there are numerous plans for building solar equipment in India to reduce costs and promote the country as a manufacturing hub for export. Son said this was part of the reason for Foxconn's inclusion in the venture, and he welcomed Prime Minister Narendra Modi's vision to create 100 gigawatts of solar energy capacity in India by 2022.
At present, installed capacity is less than 4% of that. India meets more than 60% of its energy needs from coal, and struggles constantly to meet growing demand. Since Modi came to power in 2014, investment in renewable energy has been one of his main targets during visits abroad.
Modi returned from China in May with investment secured from JA Solar, the world's largest maker of solar cells, for a joint venture with Indian conglomerate Essel Group.
China's Trina Solar and India's Welspun Energy last week signed a $500 million agreement to set up a plant producing photovoltaic cells and modules.
In January, Adani Enterprises, India's largest private power supplier, and SunEdison in the U.S. agreed to collaborate on a joint venture for integrated solar photovoltaic manufacturing with an investment of around $4 billion.
Nupur Shaw from New Delhi contributed to the story.