Macquarie Indian fund in $130m thermal deal

The Macquarie SBI Infrastructure Fund has invested in a Moser Baer-sponsored thermal power development that will bring 2,520 megawatts of electric capacity to the power-hungry central Indian state of Madhya Pradesh. The fund invested $600m in 2010, which accounts for more than half of its first close amount of $1bn.

Macquarie’s Indian infrastructure fund has invested Rs. 580 crore (€100 million; $130 million) in a thermal plant in a power-hungry region in central India.

The Macquarie SBI Infrastructure Fund is committing the money to phase one of the development of the 2,520 megawatt MB Power plant in the central state of Madhya Pradesh.

Phase one accounts for about half of the total capacity of the project, 1,200 megawatts, and already has Rs. 4,680 crore ($1 billion) of debt from the State Bank of India and Axis Bank, Macquarie said in a statement. Macquarie said its investment of Rs. 580 crore means phase one is now “fully funded”.

“Since Madhya Pradesh today faces a 17.7 percent power deficit, our power project will significantly address the state’s requirement of power,” MB Power chief executive officer Lajpat Shrivastav said in a statement.

MB Power is a subsidiary of Moser Baer Projects, the Indian energy developer specialising in solar, hydro and thermal power. The total cost of its MB Power plant in Madhya Pradesh is Rs. 13,700 crore ($3 billion) and the plant’s total 2,520 megawatt capacity is expected to be fully commissioned by the end of 2014, according to the statement.

For the Macquarie SBI Infrastructure Fund, jointly managed by Macquarie and the State Bank of India, the investment marks a conclusion to a busy year. The fund committed $600 million in 2010, according to the statement, which represents more than half the $1 billion the fund raised on its first close in April 2009.

The fund’s 2010 investments included buying an 11 percent stake in Viom Telecom, an Indian mobile tower operator, for $304 million, and a 12 percent stake in Adhunik Power and Natural Resources, an Indian power developer, for $27 million.

Varun Bajpai, chief executive of the Macquarie SBI Infrastructure Fund, said in the statement that Macquarie may yet do more deals in India’s power sector.

“Given the significant power deficit in India, we believe the power sector offers considerable opportunities,” Bajpai said.