India’s Essar Group plans to invest billions of dollars in low-carbon projects in Saudi Arabia, the UK and India, as the company transitions into clean energy investments.
The conglomerate controlled by billionaire brothers Shashi and Ravi Ruia expects to get final approvals by June to start investing about $4 billion to build a low-carbon steel plant to produce 4 million tons per year in Ras Al-Khair, Saudi Arabia, said Prashant Ruia, director of Essar Capital, which manages the group’s portfolio of investments.
“Once we get all the approvals, we have set a three-year timeline to build the project,” Ruia said in an interview at an investment conference in Riyadh. “We are building up this plant to meet the boom taking place in domestic demand for steel.”
Essar, which turned debt-free last year after selling some infrastructure assets, also plans to invest $3.6 billion to develop a range of low-carbon energy projects over the next five years. These include a $2.4 billion project to decarbonize its oil refinery in the UK and a $1.2 billion green ammonia plant in India to supply the UK and other international destinations in about three and a half years.
“We have a demand for green ammonia and biofuels in the UK and in Europe, so we want to use India as a supply chain to export green fuels and green ammonia to European markets and to the UK,” said the Indian executive.
Ruia said low-carbon energy projects still cannot replace fossil fuels though their production costs should decrease as more companies invest in them.
“The moment we start investing in these low-carbon technologies, the cost of doing this will also come down,” he said. “Compare the cost of producing renewable power 10 years ago and the cost today and you will see it is down by a 10th, it’s now lower than the cost of making power from coal or gas.”
Source: Bloomberg
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