Piramal Enterprises, APG Asset Management commit $132 million to Essel Green Energy

Essel Green Energy currently owns 160 MW of solar assets in four states of India, of which, 110 MW is operational and 50 MW is under construction

Mumbai: Ajay Piramal-controlled Piramal Enterprises Ltd and Dutch pension fund asset manager APG Asset Management will jointly invest $132 million (Rs.900 crore) in Essel Infrastructure Ltd’s solar platform across India, the companies said in a joint statement on Tuesday.

The solar platform, Essel Green Energy Pvt. Ltd, currently owns 160 megawatt (MW) of solar assets in four states of India, of which, 110 MW is operational and 50 MW is under construction. The company plans to raise capacity to 1,000 MW over the next two to three years.

The new investment from Piramal Enterprises and APG Asset Management will be used to grow the solar business, the statement said. Ernst and Young India acted as the financial advisor to Essel Group in the transaction.

In 2014, Piramal Enterprises and APG Asset Management, Netherland’s largest pension fund, said they would invest $1 billion in India’s high-growth infrastructure sector over the next three to four years.

Essel Infraprojects, a part of Subash Chandra-led Essel Group, has projects across roads, power transmission and distribution, urban infrastructure, and renewable energy.

“We view India as an attractive renewable energy market with favourable growth dynamics. APG is a strong supporter of increased investments in sustainable energy generation,” said Hans-Martin Aerts, head of infrastructure investments Asia Pacific at APG.

APG Asset Management was managing pension assets of more than €400 billion as at the end of January.

India has a target of installing 100 gigawatts (GW) of solar power capacity and 60 GW of wind power capacity by 2022 as part of the Narendra Modi-led National Democratic Alliance (NDA) government’s efforts to lower dependence on coal-fuelled electricity.

Global companies including the US-based SunEdison Inc., Japanese telecommunications company SoftBank Corp., Italy’s Enel Green Power, French utility EDF, and Indian companies including Welspun Renewables Ltd, Goldman Sachs-backed ReNew Power Ventures Pvt. Ltd, Morgan Stanley-owned Continuum Wind Energy Ltd, JP Morgan-backed Leap Green Energy Pvt. Ltd and NuPower Renewables Pvt. Ltd are already expanding in the Indian clean energy market.

Piramal Enterprises is a diversified company with consolidated revenue of over $830 million in fiscal 2015. The company provides financing to real estate companies through its Piramal Fund Management Division and provides long-term capital to capital intensive businesses through its Structured Investment Group fund. The total funds under management under these businesses stand at about $2.7 billion.

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Godrej Properties raises $275 mn for its real estate fund management business

Godrej Properties said it has created a separate real estate fund management business in India and Singapore and the capital has been raised through this

In 2012, Godrej Properties and an APG-led investor consortium struck a partnership, one of the first of its kind, to jointly invest Rs.770 crore in residential projects. 

Bengaluru: Godrej Properties Ltd on Monday said it has raised $275 million for Godrej Residential Investment Program II (GRIP-II) with Dutch pension fund asset manager APG Asset Management NV as the lead investor.

The Mumbai-based developer said it has created a separate real estate fund management business in India and Singapore—Godrej Fund Management (GFM)—and the capital has been raised through this. The new pool of capital will invest in residential projects.

Karan Bolaria has been appointed to head GFM and will be responsible for managing both series of the residential investment programmes as well as any future strategies that GFM will undertake.

In 2012, Godrej Properties and an APG-led investor consortium struck a partnership, one of the first of its kind, to jointly invest Rs.770 crore in residential projects. Last year in July, Godrej Properties and APG, through their joint investment and development venture, bought 18 acres of land from realty firm Puravankara Projects Ltd, off Kanakpura Road in Bengaluru, with which the corpus was fully deployed.

GRIP-II is a follow-on residential development platform, where GFM will advise on investments with Godrej Properties in India. The latter will hold a 20% stake in the second platform. “The new GRIP II platform in partnership with APG will help us attract high quality long-term equity investors to partner with us in our developments across India. This fits well with our strategy of deepening our presence across the country’s leading real estate markets while maintaining a capital-light development strategy,” said Pirojsha Godrej, managing director and chief executive, Godrej Properties.

“Our strategy of partnering with only the best local operators has allowed us to succeed in a complex market like residential development in India. In spite of a general slowdown in the asset class in the country over the last three years, our partnership projects have sold well, which is a testament to our partner’s execution capability and brand strength. We look forward to deepening the collaboration between our groups and supporting Godrej Fund Management,” said Sachin Doshi, managing director and head of private real estate investments, Asia Pacific, at APG.

Godrej Properties Ltd rose as much as 3% to Rs.290.70, while India’s benchmark Sensex index rose 0.44% to 25,063.43 points.

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