CPPIB to join ADIA and Goldman as a ReNew investor

The Canadian pension’s proposed $350m investment may result in the third-largest shareholding in the Indian renewables developer.

The Canada Pension Plan Investment Board plans to spend up to $350 million to buy a 16.3 percent stake in Indian renewables developer ReNew Power Ventures , according to a filing with the Competition Commission of India, the country’s antitrust regulator.

The deal will involve two separate transactions, the first of which will see CPPIB invest about $200 million in compulsorily convertible preference shares that will mandatorily convert into ReNew equity shares when the Indian company launches an initial public offering. “The ownership is expected to be not more than 10 percent of the equity share capital, on a fully diluted basis, of ReNew,” said the Canadian pension.

For the second deal, CPPIB will buy approximately 6.33 percent of ReNew’s equity shares, also on a fully diluted basis, from the Asian Development Bank. The value of this second transaction was not disclosed, but local reports suggested the stake will be valued at between $130 million and $150 million, which represents an enterprise value of up to $2.37 billion.

Should the transactions be completed, the Canadian pension will join the Abu Dhabi Investment Authority, Goldman Sachs and Global Environment Fund as investors in the Indian company, which develops wind and solar power projects across India. It has more than 3.5GW of renewable energy assets commissioned and under construction.

In February this year, JERA, a joint venture between Tokyo Electric Power and Chubu Electric Power, invested $200 million for a 10 percent stake in ReNew Power.

In addition to equity investments, the Indian developer also raised more than $600 million in financing, including $395 million from the ADB and $250 million from the US’s Overseas Private Investment Corporation over the past two years.

The C$316.7 billion ($246.3 billion; €207.6 billion) CPPIB has been investing in India since 2010 and has a presence in the India’s infrastructure, real estate and financial services sectors. It invested $332 million in Larsen & Toubro India Development Projects, the country’s largest private toll road concession operator, in 2014.