Tata Power, India’s largest integrated private power player, announced the signing of a share purchase agreement with BP Alternative Energy Holdings to purchase their 51% Equity and Preference shares in the Joint Venture- Tata BP Solar (the “Company”). On completion of transaction, Tata Power will own 100% of the company.

Approval as required from the Reserve Bank of India will need to be obtained before the transaction is completed. The transaction will also entail a change in control in the Company and hence the approval of The Competition Commission of India (CCI) will be required for completing this transaction.

Tata Power and BP have agreed that the Company will continue to enjoy access to certain BP technology until 2013.The Company and BP will enter into a technology agreement to give effect to this understanding. To provide for a smooth transition in respect of branding and fulfilment of recertification requirements for solar PV modules, Tata Power and BP have agreed for a transition period for product and non-product related rebranding and certification.

The Jawaharlal Nehru National Solar Mission’s ambitious target of 20,000 MW of solar power by 2022 is supported by policy incentives for projects in Phase-I and Phase-II, such as solar power purchase obligations, attractive feed-in-tariffs and incentives to set up land-based and rooftop solar installations. States like Gujarat, Maharashtra and Tamil Nadu have also come out with their solar policies incentivising the set up of solar power projects. The policies also lay emphasis on usage of indigenously manufactured modules for getting the above incentives.  Further, as per the studies done by various independent agencies, the size of the solar market in India will go up to anywhere between 800 to 1200 MW by the year 2014 -15. This provides a great opportunity for Tata BP Solar to grow and further its business in India.

Speaking on the occasion, Mr. Anil Sardana Tata Power said “We are happy to acquire higher equity in Tata BP Solar. We believe that the favourable policy environment in India has led to an increase in the size of the solar module and solar cell market in India and is a great opportunity for the Company to grow and capture a healthy market share. We would also like to reiterate that Tata BP Solar is not impacted by the decision of BP to gradually exit its solar business and that it is Business As Usual for them.”

Tata BP Solar India Limited (JV) was incorporated as a Joint Venture between Tata Exports Ltd (renamed Tata International Limited) and BP Solar India Holdings Limited (renamed BP Alternative Energy Holdings Limited) (BP) in 1989 for the purpose of manufacturing photovoltaic (PV) cells and modules. BP holds a 51% stake in the share capital of the JV. Tata BP Solar has a 125 MW solar module manufacturing capacity.