Piramal Enterprises Ltd (PEL) has signed an MoU with Canada Pension Plan Investment Board (CPPIB) to launch India’s first renewable energy-focussed infrastructure investment trust (InvIT) with an initial corpus of $600 million. The trust will look at acquiring 1.5-2 GW of stable and cash generating renewables assets.

Drawing investors

PEL and CPPIB will act as co-sponsors of the proposed InvIT and hold up to 75 per cent of the units. CPPIB will hold 60 per cent with an investment of $360 million while Piramal will hold 15 per cent with a commitment of $90 million. The balance 25 per cent will be raised from other “like-minded investors”. 

Prior to its launch, PEL and CPPIB will jointly warehouse seed assets for the proposed InvIT. PEL will act as the sole investment and project manager for the venture.

Ajay Piramal, Chairman, Piramal Group, said: “The renewable energy sector is at an inflection point and is witnessing significant consolidation. We believe that the timing is opportune for aggregating assets in this sector given that the existing players are willing sellers in the light of a constrained capital market environment — both debt and equity. This is the first truly neutral ‘white-label’ InvIT — led by a fiduciary and supported by patient capital and strong corporate governance — that we believe, can serve as a strong catalyst for the sector as a whole.”

The InvIT is part of a larger business plan for the Piramal Group to set up an asset aggregation platform with long tenure assets and a stable income stream.

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