Honda picks minority stake in renewable energy firm OMC Power
image for illustrative purpose
Auto major Honda Motor Co Ltd has picked up a minority stake in OMC Power, becoming the third Japanese company to invest in the homegrown entity, which is working to build a 1 gigawatt renewable energy (RE) portfolio in India, according to industry sources.
The investment has come at a time when OMC Power is entering into a new business vertical where the company will deploy electric vehicle (EV) batteries as a battery energy storage system (BESS) solution, and re-purpose the old EV batteries to support UPS (uninterrupted power supply), like the inverters or some similar kind of applications.
According to industry sources, Honda Motor is learnt to have picked up a 5-10 per cent stake in OMC Power and may increase its share in the future. In an interaction, OMC Power MD & CEO Rohit Chandra said both companies had been in talks for over 4 years to work out a business collaboration.
It is the result of research and development, market studies, feasibility studies, and customer trials, all of which have led to this investment now. It is also the first investment made by Honda Motor in a distributed energy platform in India, he noted.
"It is a win-win situation for both of us. Our partner is a leader in automobiles. It is coming up in EVs in a big way. Honda Motor will share its technical know-how, and we will provide them with the opportunities in our 1 GW journey," he said.
Honda Motor has become the third Japanese entity to invest in OMC Power, joining Mitsui & Co. and Chubu Electric Power as existing investors. As per sources, while Mitsui & Co. has a 26 per cent stake, Chubu Electric Power, with a 30 per cent equity stake, is the largest Japanese investor in OMC Power.
In a media statement, OMC Power said the collaboration aims to extend the lifecycle of EV batteries, while addressing the needs of storage-based stationary applications. "Honda and OMC have demonstrated the potential of repurposing Honda's detachable and portable batteries, originally used in electric two- and three-wheelers, for innovative storage-based clean energy solutions," it said.
