Actis creates renewable energy platform in India under Ostro; commits $230M

Emerging markets-focused private equity major Actis has committed an investment of $230 million (Rs 1,400 crore) to create an India renewable energy platform christened Ostro Energy, it said on Wednesday.

Ostro is Actis’ fifth such country- or region-specific energy platform of its kind to date, having previously launched Globeleq Meso America in Central America, Zuma Energia in Mexico, Atlantic Renovaveis in Brazil and Aela Energia in Chile.

It has named Ranjit Gupta as the CEO of the platform. IIT Bombay alumnus, Gupta has previously worked at Orange Powergen, Indiabulls Power and Schlumberger.

Ostro has also disclosed its maiden project Tejuva - a 50.4MW wind power unit. The project is already under construction in the Jaisalmer district of Rajasthan and is expected to be completed by mid-2015.

“Tejuva is a significant first step in helping Ostro Energy achieve its objective of becoming a leading wind power company in India. We are looking forward to working with Actis to bring the project to full capacity this year and grow the company’s project pipeline to achieve our business plan objectives,” Gupta said.

As per its website, Ostro would also look at solar power besides wind projects.

“With shortages of coal and gas, plus the environmental and social challenges associated with hydro and thermal projects, renewable energy is fast becoming critical to the energy supply equation in India,” Torbjorn Caesar, partner and co-head of energy at Actis, said.

The PE firm has deployed more than $1.9 billion in 27 energy transactions since 2002, across 21 countries, providing energy access to over 30 million people. Actis currently has $6.5 billion funds under management.

“Actis sees significant potential in the Indian renewable sector. We believe that Ostro will become a leading wind provider in this market,” Sanjiv Aggarwal, head of Actis’ energy sector investments in Asia, said.

Earlier this month,  Actis - which invests across Africa, Latin America and Asia - agreed to sell Africa power operating company Globeleq to UK development finance institution CDC and Norfund.

Last September it had committed $250 million to Mexican energy platform Zuma Energia.

Actis had raised over $1 billion for its third global energy fund in December 2013, with the pool being oversubscribed. This fund also has discretionary co-investment capital worth $262 million.

This fund Actis Energy 3 has the mandate to invest in electricity generation and distribution businesses in Latin America, Africa and Asia.

In the energy domain Actis has previously backed GVK Energy Ltd, a wholly owned subsidiary of Hyderabad-based infrastructure developing company GVK Power and Infrastructure Ltd. Media reports had said last year that it is looking to swap this stake with that of the public listed parent.

Actis, which also has a sector agnostic India investment unit, has been on the road to raise a new fund for over two years. It is yet to announce any fundraising milestones. Thee PE firm had gone slow in making new investments over the last couple of years.

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