Ajay Piramal-owned Piramal Groupplans to buy operational renewable power projects of Mytrah Energy, making the potential acquisition the first set of assets in the newly launched private InvIT that is co-owned by the Piramal Group and Canadian pension fund CPPIB.
Both partners are keen as Piramal and CPPIB know Mytrah Energy assets well and discussions are on for some time, one of two industry sources aware of the development told ET.
In 2017, Piramal had provided loans worth $277 million to Mytrah through non-convertible debentures and the amount will be due in the next few years. Mytrah had used the funds to provide exit options to existing investors such as IDFC Alternatives, AION Capital, Merrill Lynch and Goldman Sachs.
“Piramal does not want the Mytrah Energy debt to be a non performing asset and is thus keen to acquire the operational assets of Mytrah at the earliest,” said the second person.
Mails sent to Ravi Kailas, founder and chairman, Mytrah Group, did not elicit any response. Piramal and CPPIB declined to comment. Mytrah has built 2000-MW of operational and in-the-works renewable power. These assets are spread across 15 wind farms in nine states — Rajasthan, Gujarat, Madhya Pradesh, Maharashtra, Andhra Pradesh, Telangana, Karnataka, Punjab and Tamil Nadu.
Mytrah sells power mainly to state grids through long-term Power Purchase Agreements (PPAs). In addition, its 100.5-MW Tamil Nadu project sells directly to industrial buyers in short-term deals. Last September, Mytrah Energy (India) had entered into a PPA with Solar Energy Corporation of India (SECI) to build a 300-MW wind energy project in Tamil Nadu. Mytrah Energy (India) reportedly has the country’s largest wind data bank.
Set up in 2009, Mytrah Energy Limited was listed on London’s Alternative Investment Market (AIM) in 2010 by raising $80 million of equity. In April 2018, Kailas acquired shares from other shareholders through an SPV and delisted Mytrah. Now, about 80% is held by promoter Kailas and family members, while the rest is held by a few institutional investors.
Last week, CPPIB and Piramal Enterprises announced their plan to set up a renewable-energy focused InvIT to raise $600 million and buy operational assets. CPPIB will have 60% and Piramal Enterprises 15% in the InvIT, which will be the first of its kind in India’s renewable space.
Early this month, Sterlite Power had announced a power sector InvIt along with New York-based private equity fund, KKR & Co. and SIngapore's GIC.
India requires about $500 billion to create renewable energy generation capacity with tendering of 500 GW by 2028. Additionally, investments worth $250billion are required in grid expansion and modernisation for uptake of green energy capacity, according to the Institute of Energy Economics and Financial Analysis (IEEFA).
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