AMP Capital, the Australian-based global investment manager has partnered with Indian developer Sterlite Power for the deployment of a unique transmission platform in India. The partnership involves about $300 million investment, and contemplates four projects.
Both companies would invest $150 million each for the development of four projects, and have put in place debt financing, which represents about $1 billion. The projects have a circuit length of 1800 kilometers all across India, and they are intended to deliver critical infrastructure and renewable power for the country’s grid.
Moreover, the partnership marks the first of many investment projects to come, as India will tender more transmission projects, Therefore, the investment and the partnership could evolve to a $500 million investment size.
The partnership is aimed to boost India’s rapid growth on renewable energy, and to bring stability and reliability to a grid that has struggled for decades. Still, India has surpassed its ambitious goals emanated from the Paris Agreement, and now is recognized as a global leader in renewable energy.
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The first investment in India by AMP Capital
As we have reported previously, the U.S. Department of Energy has his eyes upon India’s manufacturing capacity for the development of new solar cells, ones that could compete with better prices and be more reliable and resilient.
Also, as stated by AMP Capital, “the Indian power market still has huge potential for expansion; with low relative per capita power consumption in the country. Due to years of underinvestment in transmission capacity, there is significant demand for investment; the Indian government has been actively promoting the participation of the private sector in transmission line development through the continued implementation of supportive regulatory reforms.”
For Sharat Goyal, head of India Infrastructure Equity at AMP, the partnership; “brings together operational and investment expertise to support the under-invested construction phase of power infrastructure in India. Our investment will create a pool of valuable transmission assets, with long-term contractual arrangements and a robust payment security framework, which are extremely attractive to yield-seeking investors.”
While CFO of Sterlite Power, Anuraag Srivastava, commented: “This investment is another testimony of continued trust reposed on us by the investor community.”
The partnership is the first investment in India that AMP Capital executes as a infrastructure equity strategy.