India Grid Trust (IndiGrid), India’s first power infrastructure investment trust (InvIT), has announced the completion of 100 MW of solar assets from Spanish developer Fotowatio Renewable Ventures (FRV) for INR 6.6 billion. It now holds a 100% stake in Fotowatio Renewable Ventures’s two special-purpose vehicles operating these solar assets.
With this acquisition, IndiGrid’s asset portfolio will now consist of 14 diversified power projects, including 40 transmission lines (about 7,570 ckm long), 11 substations (13,550 MVA capacity), and 100 MW of solar power plants across 18 states and one Union Territory.
IndiGrid’s acquisition of its first solar asset marks the first renewable energy acquisition by any InvIT in the country.
The 100 MW assets are fully operational and located in a high radiation zone in the 400 MW Ananthapuramu Solar Park in Andhra Pradesh. The projects benefit from a fixed-tariff, 25-year power purchase agreement with the Solar Energy Corporation of India (SECI) as the counterparty. The projects have been operational for over two years.
“This transaction is in line with IndiGrid’s strategy to acquire solar projects with long-term power purchase agreements, operational track record, and financially strong counterparties/off-takers such as SECI and NTPC. In addition to long contract life and low-risk cash flows, this asset complements IndiGrid’s transmission portfolio with synergies on operations and regulatory establishments,” IndiGrid said in a BSE filing.
The acquisition funded by a combination of debt, internal accruals and recent Rights Issue would boost IndiGrid’s distribution per unit (DPU).
Commenting on the acquisition, Harsh Shah, Chief Executive Officer of IndiGrid, said “We are excited to diversify our portfolio and add the first set of solar assets. This acquisition is DPU accretive and would result in healthy addition to our net distributable cash flow. While power transmission assets remain at the core of IndiGrid’s growth strategy, we believe such attractive opportunities to acquire good quality solar projects ties in well with our strategy of providing predictable cash flows to our investors and reinforces our commitment to be a socially responsible organization.”
Cyril Amarchand and Mangaldas, PriceWater Coopers and Mahindra Teqo advised IndiGrid on this transaction. Greenstone Advisors acted as the sell-side advisor on the transaction representing FRV.
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