Piramal Enterprises Ltd (PEL) has announced that it has signed an MoU (memorandum of understanding) with Canada’s largest pension fund manager, Canada Pension Plan Investment Board (CPPIB) to set up India’s first renewable energy-focused Infrastructure Investment Trust (InvIT).
The proposed InvIT will have an initial corpus of $600 million with an option to increase it further, Piramal said in a regulatory filing. The Canadian pension fund and Piramal will be initially allocating $360 million and $90 million, respectively, to the corpus. The trust will seek to raise the remaining amount from other investors.
“We are pleased to partner with CPPIB on the launch of the first-ever InvIT in India, focused on renewables. The foundation of this partnership is based on a shared ethos and values that leverage CPPIB’s global track record of value creation in the infrastructure space with Piramal Enterprises’ long-term strategy and goodwill in India,” said Ajay Piramal, chairman, Piramal Group.
“We are enthusiastic about the opportunity as it is truly scalable and continue to remain committed to creating value for our shareholders,” he added.
For the proposed InvIT, Piramal will be the sole investment manager and project manager. The InvIT will seek to acquire up to 1.5-2 gigawatt of stable and cash-generating renewable energy assets on a hold-to-maturity basis, Piramal said in a statement.