Abu Dhabi’s International Holding Company (IHC), a conglomerate spanning fisheries to healthcare, is investing $2bn in companies belonging to Gautam Adani’s infrastructure empire, as India pursues ambitious green energy targets.

IHC’s investment comes less than eight weeks after India and the UAE signed a trade deal and as Adani seeks to fund his sprawling ports-to-power conglomerate. India is the UAE’s second largest trade partner.

The Adani Group has diversified from ports and coal-fired power plants into green energy, in an ambitious decarbonisation strategy led by chair Gautam Adani. He has recently surpassed Reliance Industries chair Mukesh Ambani to become Asia’s richest man, according to Forbes.

Although its per capita emissions are far lower than many European countries, India’s dependence on coal-fired power has made it one of the world’s biggest emitters of greenhouse gasses.

“There’s a lot of bilateral government to government discussions happening,” said Vibhuti Garg, India lead at the Institute for Energy Economics and Financial Analysis about investing in India’s green energy sector. “That’s given [governments] the confidence to invest with private entities like Reliance and Adani.”

IHC is chaired by Sheikh Tahnoon bin Zayed al-Nahyan, the UAE’s national security adviser and one of the monarchy’s most influential figures. IHC’s total assets more than quintupled in 2021, according to its integrated financial statement, to reach 89bn dirhams ($24bn). Its portfolio includes holdings in construction, tech and sports.

Sagar Adani, executive director of Adani Green Energy, called it a “landmark transaction” marking the “start of a wider relationship between the Adani Group and IHC and attracting further investment from UAE into India”.

With India’s government aiming to install 500GW of renewable energy by 2030, Adani is going head-to-head with Ambani to dominate the nascent sector.

Adani has said he wants his group to be the world’s largest renewable energy company by 2030, pledging to invest $20bn in building up India’s renewable energy infrastructure over the next decade. That includes green hydrogen, which India’s prime minister Narendra Modi has made central to his ambitious energy plan.

“There’s a lot of interest from the UAE, primarily because there’s a lot of push on green hydrogen now,” Garg added. Adani Group in February agreed to research making hydrogen fuel cells for transportation with Nasdaq-listed Ballard Power Systems.

In the $2bn transaction, IHC will invest around $500mn each in Adani Green Energy and Adani Transmission, the group’s power transmission company, and $1bn in Adani Enterprises, its holding company, by preferred share issue.

While $2bn is “a drop in the bucket, Garg said, “it’s a good start. India needs a huge amount of finance” for renewables.

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