Canada’s largest pension fund manager Canada Pension Plan Investment Board (CPPIB) is in advanced talks to invest about $300 million in renewable energy producer Mytrah Energy Ltd for a significant minority stake, according to two people aware of the development. “Mytrah wanted to bring in a long-term investor and the proposed funds will be used for expansion,” said one of the persons cited above. Mytrah Energy had put its plan to raise dollar bonds worth $500 million on hold after the US Federal Reserve raised interest rates recently.
The company has 2 gigawatts of renewable energy capacity that’s operational and under development. These assets are spread across 15 wind farms in nine states— Rajasthan, Gujarat, Madhya Pradesh, Maharashtra, Andhra Pradesh, Telangana, Karnataka, Punjab and Tamil Nadu. “We are in process of raising growth capital and there is interest from multiple investors,” said Mytrah Energy chief financial officer Shirish Navlekar without disclosing further details. A CPPIB spokesperson declined to comment. CPPIB, which has an exposure of more than $5 billion in India, holds a minority stake in India’s largest renewable player ReNew Power VenturesNSE -1.61 % with an investment of about $391 million. CPPIB, which had invested $144 million in ReNew in January, made an additional investment of $247 million in ReNew Power to help finance the acquisition of Actis PE’s energy platform Ostro Energy in April. As of March 31, CPPIB managed over $356 billion in investment assets across the globe.
Set up in 2009, Mytrah Energy listed on London’s Alternative Investment Market (AIM) in 2010 by raising $80 million. In April, Mytrah chairman and founder Ravi Kailas acquired shares from other shareholders through a special purpose vehicle, Raksha Energy Holdings, and delisted from AIM.
In September, the company raised debt financing worth $277 million from the Piramal Group and bought back the stakes from existing investors AION Capital, IDFC Alternatives Ltd, Merrill Lynch and Goldman Sachs. Close to 80% is held by Kailas and his family members while the rest is held by a few institutional investors.
India has set a target of 175 GW of renewable energy capacity by 2022 including 100 GW of solar and 60 GW of wind energy, sparking increased interest from global investors. “As tariffs remain at a record low, producers are keen for long-term investors such as global pension funds who can stay for minimum 10-15 years than typical private equity funds with an investment horizon of five-six years,” said a renewable energy promoter in fundraising mode.
