Taqa led consortium invests $1.6 billion in two Indian hydro plants

• 10 years ago (2014-03-05)
• Junior Isles

Middle East 312 North America 998

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A consortium led by United Arab Emirates' Abu Dhabi National Energy Co. (Taqa) is investing $1.6 billion in equity to acquire two hydro plants from India's Jaypee Group.

The acquisition includes the plants’ debt and will give the consortium full ownership of the plants, and once completed will rank amongst the top 15 foreign investment deals ever made in India.

Taqa said it will hold a 51 per cent stake in the consortium, with an unnamed Canadian institutional investor, believed to be Canada's Public Sector Pension Investment Board, and IDFC Alternatives, an investment unit of Indian financing firm IDFC Ltd., holding the remainder.

The two plants are just 35 km from the Sorang hydro plant in Northern India in which Taqa acquired a stake last year.

After the deal is closed, Taqa's power generation capacity in India will total 1741 MW from the three hydroelectric facilities and one lignite power plant.

Taqa said it is "pleased to support India's economic growth" and stated that the deal fits with the company's strategy of investing in markets with "strong growth potential”.

Taqa is already looking for other acquisition opportunities in India as it expects further consolidation in the country's power and utilities sectors.

This interest in Indian infrastructure follows a treaty signed in December between the UAE and India to bring $2 billion of UAE money to the sector.

Jaypee Group, an infrastructure conglomerate with a diverse portfolio, has been trying to reduce its nearly $10 billion debt, and sold one of its cement plants in the western state of Gujarat for about $600 million only last year.