Tata Power’s wholly owned subsidiary Tata Power International and ICICI Venture today announced the creation of a platform company (‘platform’) to facilitate investment in power projects in India in the coming two-three years, which are in advanced stages and near operational readiness or operating. The platform is co-sponsored by Tata Power and ICICI Bank and has commitments from partner investors, Caisse de dépôt et placement du Québec (CDPQ) of Canada, Kuwait Investment Authority (KIA) and the State General Reserve Fund (SGRF) of the Sultanate of Oman, which are some of the largest investors globally. The platform will raise an initial capital of up to $850 million to be contributed by the sponsors and partner investors either directly or through their affiliates. This can be upsized going forward, depending on market opportunities. The platform targets acquisition of controlling stakes in power generating companies, both conventional thermal, hydroelectric and transmission assets in India.
“It has been our constant endeavour to leverage opportunities in the Indian power sector and create stakeholder value through organic and inorganic means. This platform is one such step in this direction for assets that would be win-win for all stakeholders as it would be value accreting considering the assets would be near-completion or already operating. We are happy that Tata Power International has taken the initiative to join with co-sponsors and investors of tremendous reputation namely ICICI, CDPQ, KIA and SGRF, and we hope this would generate good value for them too,” said Anil Sardana, CEO and MD, Tata Power.
“The platform combines the complementary skills of the sponsors and the blue-chip sophisticated investors. Insightful understanding of the lndian infrastructure ecosystem supported by discerning long term global capital would provide a framework for investments with an optimum risk-return profile and also act as a catalyst for revitalisation and growth of the Indian power sector,” said Mohit Batra, executive director, ICICI Venture. “Tata Power and ICICI are key strategic players in India and their sophisticated knowledge of the market, combined with their vast expertise in infrastructure and energy, will provide critical insight to the platform. As we continue to build our presence in India, a priority market for us, we value these well-established partners that share our long-term approach to investing,” said Rashad Kaldany, executive vice-president, growth markets at CDPQ.
“We are excited to be part of this platform that combines the expertise of two of India’s leading business groups along with international reputed institutional investors. We are also particularly thrilled to invest in the world’s fifth largest electricity producing country and increase our exposure to Indian infrastructure, a key beneficiary of India’s economic development,” said HE Abdulsalam Al Murshidi, executive president of SGRF.
Development of the Indian power sector
In 2014, the government adopted an ambitious five-year programme worth close to $250 billion to complete the electrification of the country to sustain economic growth, improve living conditions for the poorest populations and replace traditional fuels with electricity. The additional capacity required to meet the demand is estimated at 93 GW by 2022, and will be generated through conventional and renewable sources. The required investments will come from both public sources and private investors.