Honda Motor becomes third Japanese entity to invest in homegrown OMC Power, picks up minority stake

Japan's auto giant Honda Motor has bought a minority stake in an Indian renewable energy services company, OMC Power, according to industry sources.

The investment comes at a time when OMC Power, which is aiming to build a 1 gigawatt (GW) renewable energy portfolio in India, is venturing into a new business vertical. Under the new venture, the homegrown energy 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 (and similar applications).

Honda Motor has picked a minority stake, in the range of 5-10%, in OMC Power, a PTI report said, citing industry sources.

"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," the PTI report said.

It is also the first investment made by Honda Motor in a distributed energy platform in India, Chandra 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," the report quoted Chandra as saying.

Japanese investors in OMC Power

After joining Mitsui & Co. and Chubu Electric Power, Honda Motor has become the third Japanese company to invest in India's OMC Power.

Mitsui & Co. has a 26% stake, while Chubu Electric Power is the largest Japanese investor in OMC Power with a 30% equity stake.

From the planned 1 GWp (gigawatt peak) or 1,000 MWp capacity of OMC Power, which operates across four business verticals, 600 MWp will be achieved from rooftop solarisation for customers in the healthcare space, where it has a capacity of 75 MWp, Chandra said.

Nearly 200 MWp will be added to its green energy for telecom verticals, where the company supplies power to tower companies from 15 MWp capacity.

Further, to serve rural areas, the company plans to add another 100 MWp to its smart grids, bringing its operational capacity to 10 MWp.

It will also add 100 MWp in solar EPC space for MSME and C&I (Commercial and Industrial) customers, starting with 5 MWp.

The fifth segment will be launched next month with the joining of two Honda Motor officials to the management team of OMC Power, who will support OMC Power with their technical expertise, Chandra said.