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AIIB to lead Rs 2,500 cr funding in Mahindra-OTPP’s Green InvIT


Mumbai: Sustainable Energy Infra Trust, a renewable energy infrastructure investment trust (InvIT) backed by Mahindra group, is raising Rs 2,500 crore in a round led by Asian Infrastructure Investment Bank (AIIB) with participation from domestic institutional investors (DIIs), people aware of the development said.

ET had first reported on August 22 that AIIB, Dutch pension fund APG Asset Management, and World Bank arm International Finance Corp were in separate talks to invest capital in the Mahindra Susten and Canadian pension fund Ontario Teachers’ Pension Plan (OTPP)-sponsored InvIT. Sustainable Energy Infra will house 1.54 gigawatts (GW) of solar assets.


“AIIB is coming in as the anchor investor and will lead this round with a close to $80-million cheque (approximately Rs 665 crore),” one of the people cited above said. “In addition, several domestic institutional investors are investing around $60-70 million (Rs 500-600 crore). A formal closure of the deal and announcement is expected in early January.” Rest of the capital will come from Mahindra Susten and OTPP as sponsor commitment, the person said.

“This is just the first tranche of investment from AIIB and it is most likely to invest more in the InvIT in the future as more assets are dropped into it by the sponsors,” the source said. “AIIB is also keen on investing in debt instruments that the InvIT plans to issue to refinance debt at the level of the operating assets.”

Emails sent to AIIB and OTPP did not elicit a response. Mahindra group declined to comment.

The funds raised will be used to refinance the existing debt of the solar projects that are being housed under the InvIT, including repayment of loans provided by Mahindra Susten.

Total debt of the InvIT portfolio stood at Rs 4,797.7 crore as of August 31, as per a draft placement memorandum filed with markets regulator, the Securities and Exchange Board of India (Sebi).

Apart from the equity funding, the InvIT will also raise debt, which will also be used to repay existing loans.

Mahindra Susten’s businesses include the conglomerate’s renewable-focused engineering, procurement and construction (EPC) unit (with more than 4 GW of capacity constructed) as well as an independent power production (IPP) unit with around 1.54 GW of operational solar plants. The entire 1.54 GW are being transferred to the InvIT.


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