CDPQ, Gulf sovereign funds seed Indian power platform

TATA and ICICI have joined forces with three institutional investors to launch an $850m vehicle that will target thermal, hydro and transmission power assets.

Indian electricity giant Tata Power and alternative assets manager ICICI Venture have secured $850 million for a new platform company that will invest in Indian power projects over the next two to three years. 

The vehicle’s seed capital will come from the two sponsors as well as from third-party investors including Canada’s Caisse de dépôt et placement du Québec, the Kuwait Investment Authority and the State General Reserve Fund of Oman. Tata Power said the platform may grow in size over time, depending on the number of future opportunities to deploy the money. 

The vehicle aims to acquire controlling stakes in power generating companies, including thermal and hydroelectric businesses, as well as transmission assets that are close to operating or already operational. 

In 2014, the Indian government announced a five-year plan to electrify the country. Tata believes India must receive as much as $250 billion of investments to boost its power infrastructure, with 93GW of additional power capacity needed by 2020 to meet fast-growing demand. The scale of the investment required means the capital must come both from public pockets and private investors, the company says.

Last June, Tata Power, India’s largest integrated power company, acquired a 1.1GW renewables portfolio from local developer Welspun Energy for $1.37 billion. The transaction brought the company’s installed gross generation capacity to 10.3GW, including about 2.3GW of renewable energy projects.