A consortium led by Abu Dhabi based Taqa has agreed to acquire the Baspa Stage II and Karcham Wangtoo plants in the Indian state of Himachal Pradesh for US$616 million.
The agreement to buy the plants from Jaiprakash Power Ventures Limited, a subsidiary of Indian infrastructure conglomerate Jaypee Group, follows the signing of the UAE-India Bilateral Investment Promotion and Protection Agreement in December 2013 and a commitment made by the UAE to invest US$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.
With a 51% stake in the consortium, Taqa 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%) and IDFC Alternatives' India Infrastructure Fund II (10%).
"India's economic growth depends on having ample and reliable energy supply," said Frank Perez, Taqa's Executive Officer and Head of Global Power & Water. "Taqa is pleased to add these two high quality hydro power assets to our growing India business and to support India's economic growth."
The run-of-river plants are located in the Kinnaur district and have a combined capacity of 1391MW.
News of the acquisition follows a similar deal announced by Taqa in 2013, when it acquired a stake in the Sorang hydroelectric plant. With the addition of the two new projects, Taqa's gross operational power generation capacity in India will total 1741MW, comprised of three hydroelectric facilities and one lignite power plant.
The deal is expected to close in 2014 and is subject to regulatory and third party approvals.
Photo: Karcham Wangtoo hydro plant in the Indian state of Himachal Pradesh (Courtesy Jaypee).
