Equis Funds Group (Equis), a Singapore-based fund manager, has invested around $40 million in an Indian power deal involving almost 200 megawatts of run-of-river hydropower generation facilities, according to market sources. The overall deal value is thought to be around $320 million.
Equis is understood to have partnered with Indian hydroelectric owner and operator DANS Group on the deal. The facilities have commenced construction and are expected to become operational in 2014, when they will sell power under long-term power purchase agreements with Indian state electricity boards.
Equis completed its debut deal earlier this month when, according to market sources, it invested around $50 million of equity in a $200 million acquisition of solar energy assets in Thailand. The seller was believed to be a local developer.
In a fundraising cover story in the the upcoming September 2012 issue of Infrastructure Investor, Equis chief executive David Russell said the love affair with certain traditional sectors of infrastructure in Asia such as toll roads, may lead to disappointment.
He said: “The sector has a history of traffic over-forecasting, competition for minority stakes and suddenly you are hoping for capital market improvements and earnings re-ratings to get you out of your investment. Why aren’t investors undertaking an in-depth analysis of the power and energy sectors, the first and most fundamental sectors for growing economies and where government policy initiatives are creating and incentivising investment?”
Focused on energy and infrastructure, Equis had last month received committed capital of $386 million for its debut fund on its way to a $500 million target. Market sources say they expect that target to be reached within the next few months and that, by the end of the year, the fund may go on to reach its hard cap of $750 million.
Three of Equis’ co-founders are former senior executives at Macquarie. Russell was Macquarie’s head of Asian private equity and head of Greater China.