Canadian pension fund Caisse de dépôt et placement du Québec (CDPQ) has invested an additional $100 million (Rs 730 crore at current exchange rates) in Azure Power Global Ltd, hiking its stake in the renewable energy firm to 40%.
CDPQ, which has rapidly built a strong presence in India as an institutional investor, said in a statement that the latest infusion means it has invested $240 million overall in Azure Power since first backing the company in September 2016. The initial investment of $75 million, which was CDPQ’s first India deal, was made just before Azure Power listed on the New York Stock Exchange .
Emmanuel Jaclot, CDPQ’s executive vice president for infrastructure, said that India is a priority market for the firm and this investment fits the pension fund’s desire to contribute to a low-carbon economy.
Last year, CDPQ said that it would increase its low-carbon investments by 50%, which would translate to 8 billion Canadian dollars.
CDPQ had last month invested $365 million for a 40% stake in power producer CLP India, which said it would seek to expand investments in low-carbon growth areas.
Since its inception in 2008, Azure Power has developed a pan-India portfolio of 3 GW comprising varying solar projects such as utility scale, rooftop, and mini and micro grids. It is present in 23 Indian states.
The energy company is backed by global development finance institutions (DFIs) such as the International Finance Corporation (IFC), which is the private-sector investment arm of the World Bank, Germany’s Deutsche Investitions- und Entwicklungsgesellschaft (DEG) and France’s Proparco.
Some of these DFIs received a partial equity exit at the time of the company’s listing. Subsequently, a few of them have extended debt financing to Azure Power.
Earlier this year, Azure Power said it had received $135 million in debt financing from lenders including IFC, Dutch development bank FMO, Proparco and Austrian development bank OeMB.
Azure is the only Indian independent power producer to be listed on the NYSE.
Other major rooftop solar companies in the country include CleanMax Solar, Amplus Energy Solutions and Sunvest Energy Pvt. Ltd.
Rooftop projects have gained traction in recent years after the government set a target of 100 GW of solar capacity by 2022, including about 40 GW from rooftop solar energy.
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 sizeable investments in India’s renewable energy sector.
CDPQ has so far invested $4.5 billion across sectors such as infrastructure, real estate, stressed assets and renewable energy, among others, in partnership with the likes of Edelweiss Group, Piramal Enterprises and Kotak Mahindra Bank.
VCCircle reported in May this year that India's share in CDPQ’s portfolio may triple in the next few years.
Besides making direct investments, it is also a limited partner in a Kedaara Capital fund and Tata Power-ICICI Venture’s Resurgent India fund.