A consortium led by TAQA, the international energy and water company from Abu Dhabi, has agreed to acquire two hydroelectric plants in India, making TAQA the largest private operator of hydroelectric plants in India.
The agreement follows the signing of UAE-India Bilateral Investment Promotion and Protection Agreement in December 2013 and a commitment made by the UAE to invest $2 billion in India’s infrastructure sector at the first UAE-India High level Joint Task Force on Investments meeting held in Abu Dhabi in February 2013. The consortium agreed to purchase the Baspa Stage II and Karcham Wangtoo plants in the northern State of Himachal Pradesh, from Jaiprakash Power Ventures limited, a subsidiary of Indian infrastructure conglomerate Jaypee Group.
TAQA, which holds a 51 per cent stake in the consortium, will have control of operations and management of both facilities under the proposed deal. The remaining equity will be held by one of Canada’s largest institutional investors (39 per cent) and IDFC Alternatives’ India Infrastructure Fund II (10 per cent).
The equity invested by the consortium in acquisition of two hydroelectric plants will amount to approximately Rs 3,820 crore ($616 million, based on March 1, 2014 foreign exchange rate), of which 51 percent is from TAQA. The two plants have a combined power generation capacity of 1,391 megawatt (MW). Following the completion of the transaction, TAQA’s gross operational power generation capacity in India will total 1,741 MW, comprised of three hydroelectric facilities and one lignite power plant. The acquisition is expected to close in 2014 and is subject to regulatory and third party approvals.
This investment will be recognised at the second meeting of UAE-India High level Joint Task Force to be held in Mumbai on Monday.