Global investment manager AMP Capital has established a 50:50 partnership with Sterlite Power Transmission Ltd for the development of energy transmission projects in India.
This marks the first investment in India for AMP Capital’s global infrastructure equity strategy, an official release said.
Both the partners will each invest an initial amount of around $150 million in the development of four power transmission projects. Together with a debt component that has been put in place, the total capital outlay works out to around $1 billion.
These four transmission projects have a total length of nearly 1,800 ckm, and are spread across the western, southern and northeastern regions of India. These lines will provide the critical infrastructure required for evacuating power from multiple renewable energy generation projects and will strengthen the power delivery infrastructure in the country.
The partners may in the future contribute further capital for new inter-state transmission projects which are expected to be tendered by the government of India. Therefore, the partnership has the potential to reach an overall investment size of $500 million.
AMP Capital has been investing in infrastructure since 1988 and has $21 billion infrastructure equity and debt assets under management as of June 30, 2020.
The Indian power market still has huge potential for expansion, with low relative per capita power consumption in the country. Due to years of under-investment in transmission capacity there is significant demand for investment, and the Indian government has been actively promoting the participation of the private sector in transmission line development through the continued implementation of supportive regulatory reforms, the release noted.
Sharat Goyal, Head of India, Infrastructure Equity at AMP Capital said: “AMP Capital and Sterlite Power believe that this is a unique partnership bringing together operational and investment expertise to support the hitherto under-invested construction phase of power infrastructure in India.”
Sterlite Power is a leading global developer of power transmission infrastructure with projects of over 13,700 circuit kms and 24,800 MVA in India and Brazil.
Pratik Agarwal, Managing Director, Sterlite Power, observed, “The world is undergoing a clean-energy revolution and India is leading this effort with its mammoth target of 450GW by 2030. Sterlite Power will contribute towards this noble cause by creating the required transmission infrastructure so that green energy can reach the most underserved households.”
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