Canada’s CDPQ in talks to pick up to 35% in Azure

Industry: Power 2016-09-18

MUMBAI: Canadian pension fund Caisse de depot et placement du Quebec (CDPQ) is in talks with solar-energy developer Azure Power to buy up to 35% stake in the company for about $180 million (Rs 1,200 crore), two people close to the development said.

“The talks are at an advanced stage and the investment could be concluded by the end of December this year,” one of the persons cited earlier said. “This would also give partial exit to some of the existing investors in Azure Power.”

International Finance Corporation (IFC), the investment arm of the World Bank, Foundation Capital, Helion Ventures, and German development bank DEG are the main investors in New Delhi-based Azure Power, a major player in the Indian solar power space. Most of the investors are set to get a partial exit.

Azure has been expanding and making investments aggressively. In June, it invested about Rs 800 crore to set up 150 MW of solar projects in Punjab. According to people in the know, Canadian fund Brookfield, too, had approached Azure Power for a stake buy about two months ago. ET had reported on August 15 that Brookfield was looking to invest aboutRs 500 crores for a minority stake in the company.

Canada’s CDPQ in talks to pick up to 35% in Azure

“The deal between CDPQ and Azure would be in its final lag,” the person quoted earlier said when asked whether Brookfield was still in the race. Azure Power, which was also looking to get listed on the New York Stock Exchange, may be “reconsidering” this plan, he said.

The second person said, “Negotiations are in the final stage and CDPQ could end up owning 30-35% in Azure Power and pay about $180-200 million.”

CDPQ declined to comment on the matter. Email queries sent to Azure on Monday and IFC, Foundation Cap, Helion Ventures and DEG on Thursday did not elicit any response till the time of going to press.

According to industry trackers, encouraged by the government’s renewable energy push, more private equity players are now exploring investment in Indian solar companies. Last year, ReNew Power Ventures raised $265 million (aboutRs 1,700 crores) from Abu Dhabi Investment Authority (ADIA), the UAE-based sovereign fund.

CDPQ, the second largest pension fund in Canada with a war chest of around $240 billion, has been actively exploring investment opportunities in India. ET had reported on September 14 that CDPQ was also in talks with Edelweiss ARC for buying anywhere around 30%.

Last week, CDPQ also gave a commitment that it would infuse capital in a joint investment platform announced by Tata Power and ICICI Ventures.