Cana­dian pen­sion fund com­mits $150m to re­new­ables sec­tor

The Pak Banker - - 6BUSINESS -

Cana­dian pen­sion fund Caisse de dépôt et place­ment du Québec (CDPQ) on Wed­nes­day said it has pledged an in­vest­ment of US $150 mil­lion in the re­new­able en­ergy sec­tor in In­dia, be­com­ing the lat­est for­eign in­vestor to tap the grow­ing In­dian clean en­ergy mar­ket.

CDPQ is Canada's se­cond largest pen­sion fund man­ager with C$248 bil­lion in net as­sets and in­vests glob­ally in ma­jor fi­nan­cial mar­kets, pri­vate equity, in­fra­struc­ture and real es­tate. The fund opened its first of­fice in the coun­try in New Delhi on Wed­nes­day.

The fund said it plans to in­vest the amount over the next three to four years, tar­get­ing hy­dro, so­lar, wind and geo­ther­mal power as­sets. It also in­tends to part­ner with selec­tive In­dian re­new­able en­ergy com­pa­nies, CDPQ said in a state­ment.

Two of Canada's largest pen­sion fund­sCDPQ and the Pub­lic Sec­tor Pen­sion In­vest­ment Board (PSP In­vest­ments)-are look­ing to in­vest in the In­dian in­fra­struc­ture sec­tor and have started scout­ing for as­sets, Mint re­ported in Oc­to­ber cit­ing peo­ple fa­mil­iar with the dis­cus­sions.

CPDQ's en­try into In­dia fol­lows that of its larger peer Canada Pen­sion Plan In­vest­ment Board (CPPIB), which has al­ready com­mit­ted sub­stan­tial funds to the In­dian in­fra­struc­ture sec­tor through an in­vest­ment of Rs.2,000 crore in Larsen and Toubro Ltd sub­sidiary L&T IDPL. CPPIB opened its in­vest­ment of­fice in In­dia in Oc­to­ber. PSP In­vest­ments had in Novem­ber said it would buy a 49% stake in Anil Am­bani-led Re­liance In­fra­struc­ture Ltd's elec­tric­ity gen­er­a­tion, trans­mis­sion and dis­tri­bu­tion busi­ness in Mum­bai and ad­join­ing ar­eas. Large global in­vestors, in­clud­ing pen­sion funds, have a large pool of cap­i­tal and typ­i­cally look at 14-15% yield op­por­tu­nity in In­dia. As In­dian in­fra­struc­ture as­sets start to ma­ture and com­pa­nies look to di­vest cash-gen­er­at­ing as­sets, th­ese funds are start­ing to eval­u­ate pos­si­ble in­vest­ments. IDFC Al­ter­na­tives and I Squared Cap­i­tal are among the largest in­vestors in re­new­able en­ergy sec­tor in the coun­try.

Re­new­able en­ergy in In­dia now has a large enough port­fo­lio of op­er­at­ing as­sets, which would at­tract for­eign in­vest­ments, said Man­ish Agar­wal, part­ner and leader- in­fra­struc­ture at PwC In­dia. Avail­abil­ity of as­sets with steady cash flows is now be­com­ing aligned with the re­turn ex­pec­ta­tions of the in­vestors such as the Cana­dian pen­sion funds, he said.

In­dia has a tar­get of in­stalling 100 gi­gawatt (GW) of so­lar power ca­pac­ity and 60 GW of wind power ca­pac­ity by 2022. Wel­spun Re­new­ables Ltd, SunE­di­sion Inc, NuPower Re­new­ables Pvt. Ltd, Gold­man Sachs-backed Re­New Power Ven­tures Pvt. Ltd, Hero Fu­ture En­er­gies, Hin­dus­tan Pow­er­pro­jects Ltd, Mor­gan Stan­ley-owned Con­tin­uum Wind En­ergy Ltd, and JP Mor­gan-backed Leap Green En­ergy Pvt. Ltd are some of the prom­i­nent re­new­able en­ergy firms in In­dia.

CDPQ said the $150 mil­lion in­vest­ment in re­new­able en­ergy was a first for the fund in growth mar­kets. "We be­lieve In­dia stands out as an ex­cep­tional coun­try to in­vest in, given the scope and qual­ity of in­vest­ments op­por­tu­ni­ties, the po­ten­tial for strate­gic part­ner­ships with lead­ing In­dian en­trepreneurs, and the cur­rent govern­ment's in­ten­tion to pur­sue es­sen­tial eco­nomic re­forms," said CDPQ chief ex­ec­u­tive Michael Sabia.

Newspapers in English

Newspapers from Pakistan

© PressReader. All rights reserved.