Canadian pension fund Caisse de dépôt et placement du Québec (CDPQ) has agreed to acquire a 40% stake in power producer CLP India Pvt. Ltd for Rs 2,640 crore ($365 million) in cash.
Completion of the transaction is subject to the fulfilment of various conditions precedent including regulatory approvals.
CLP entered India in 2002 and is among the handful of foreign investors in India's power sector. It has a portfolio of projects with total generation capacity of 3,000 megawatt, according to its website. This includes renewable energy capacity of 1,000 MW.
CLP Holdings said the Indian market has been, and will continue to be, a primary growth market for the group. CLP and CDPQ are aligned on the strategy for CLP India, whose recent focus has been on expanding its low-carbon business, according to the filing.
After the transaction, CLP India will seek to expand investments in low-carbon growth areas including renewable energy investments as well as non-generation business opportunities in transmission, distribution and other customer-focused businesses, CLP Holdings said.
CDPQ’s India bets
Canada’s second-largest pension fund opened its India office in 2016. Since then, it has rapidly ramped up investments in the country. At the time of opening its India office, CDPQ had said it would make sizable investments in India’s renewable energy sector.
The deal with CLP is CDPQ’s third transaction in the Indian energy sector. It had picked up shares worth $75 million in renewable energy firm Azure Power Global Ltd in 2016. The same year, it committed capital to an $850-million investment platform set up by Tata Power Co Ltd and ICICI Venture to invest in power projects.
The decision to buy a stake in CLP is in line with CDPQ’s stated strategy to make investments that contribute towards a low-carbon global economy. CDPQ had said last year it would increase its low-carbon investments by 8 billion Canadian dollars over three years.
CDPQ has also made investments across other segments in India. It agreed to invest $155 million in Chennai-based TVS Logistics Services Ltd in 2016 and jointly made investments with Edelweiss Group, via an asset reconstruction company and a separate fund, in the stressed assets segment.