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Everstone-Lightsource BP to set up $710 mn energy platform; NIIF among key backers

18 April, 2018

Private equity firm Everstone Group has formed an equal joint venture with British solar power company Lightsource BP to set up a £500 million ($710 million or Rs 4,673 crore)  India-focussed green energy fund.

The fund, named Green Growth Equity Fund (GGEF), has already received £240 million ($341 million or Rs 2,222 crore) in cornerstone investment from the British government and India’s National Investment and Infrastructure Fund (NIIF). Both institutions have infused £120 million each.

GGEF will be one of the largest India-focused sector-specific PE funds in recent years.

Everstone said in a statement that the joint venture, named EverSource Capital, aims to jointly manage funds focused on contracted power, distribution infrastructure and energy services in India. It will also provide funds and strategic resources to create green energy businesses in partnership with local management teams.

VCCircle had reported last year about the government’s plan to bring in a third-party manager for GGEF.

“By using a pooled investment vehicle and a public-plus-private partnership (PPP) approach, global investors will get the opportunity to be part of this exceptional investment platform,” said Sameer Sain, co-founder and CEO, Everstone Group.

Everstone Group is an India and southeast Asia-focussed investment manager with dedicated private equity and real estate funds. It has about $4 billion in assets under management (AUM) with offices in Singapore, Mumbai, Delhi, Bengaluru, Mauritius and London.

Lightsource BP deals with the development, acquisition and long-term management of international large-scale solar projects and smart energy solutions.

The entity is a strategic partnership between UK’s BP Plc (formerly British Petroleum) and Lightsource, which is Europe’s largest solar developer.

In a bid to re-enter the solar power business, BP had agreed to acquire a 43% stake in Lightsource in December last year to form Lightsource BP.

Lightsource, in its earlier avatar, was formed in 2010. It has since become the largest utility scale solar developer and largest operations and maintenance services provider in Europe with more than $3 billion of capital invested across around 2GW of solar projects globally.

The London-based solar firm plans to quadruple its solar capacity to 8 gigawatt (GW) through large-scale projects in the United States, India, Europe and the Middle East, according to an earlier Reuters report.

Energy space heating up

Foreign investment is crucial for India’s infrastructure and energy space. The country’s renewable energy sector has recorded heightened activity over the past few years, especially after the government in 2015 set a 175 gigawatt capacity addition target.

This led to the entry of several domestic and foreign companies in the wind and solar energy sectors, attracted private investment, accelerated project construction and drove tariffs down.

VCCircle reported on Wednesday that French development financial institution Proparco SA is in talks with two players to set up its own renewable energy platform in India.

Some of the world’s biggest pension funds, including Canada Pension Plan Investment Board and Caisse de dépôt et placement du Québec (CDPQ), are also scouting for deals in India’s solar power sector.

VCCircle reported last month that a large number of renewable energy assets in India could change hands over the next few months.

In a separate deal, ReNew Power Ventures Pvt. Ltd had said it would acquire rival Ostro Energy Pvt. Ltd from private equity firm Actis, striking the largest buyout in India’s renewable power sector and becoming the top green energy company by capacity.

Mint reported earlier this week that ReNew Power is looking to submit a proposal to float a $900 million IPO this year.

NIIF

The government announced plans to set-up a Rs 40,000 crore ($6 billion) NIIF in 2015 to boost PPP in the infrastructure space. It is aimed at catalysing capital from international and domestic investors into infrastructure and allied sectors in India.

NIIF is slated to invest in greenfield, brownfield and stalled projects. Of the total targeted pool of capital, the government committed Rs 20,000 crore ($3 billion) to be managed by NIIF Limited, the manager of NIIF, through one or more funds to be set up in partnership with other partners.

The remaining Rs 20,000 crore is expected to come from private investors, including sovereign wealth funds from countries such as Russia, Singapore, UK and the UAE.

NIIF’s investment strategy includes a provision to anchor equity, quasi-equity and debt funds in partnership with investors targeting investments in the relevant sectors in India.

In January this year, the NIIF and Dubai-based port operator DP World formed a platform to invest in ports, terminals, transportation and logistics businesses in India. The platform – NIIF’s first – will invest up to $3 billion (nearly Rs 19,100 crore) of equity to acquire assets and develop projects in these sectors.

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Everstone-Lightsource BP to set up $710 mn energy platform; NIIF among key backers

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