Macquarie Asia Infrastructure Fund (MAIF) is reported to have agreed to buy a large solar portfolio from Indian electric power developer Hindustan Power projects Pvt. Ltd for the amount of $600 million, marking the group’s long-awaited entry into India’s renewables sector.
The fund is expected to hold a 100% stake in these solar power assets, which are spread across 18 special purpose vehicles, largely located in the state of Gujarat.
Given that the projects in question were brought online in 2010, the power purchase agreements were signed at tariffs higher than the current average ones, considering the overriding trend of falling solar power tariffs.
Although there has been no official confirmation arriving from any of the companies, it is reported that of the $600 million deal value, $250 million is the equity value and about $350 million is the debt associated with the projects.
The arrival of Macquarie would come as no surprise as it would be yet another major foreign investor that has recognized the great appeal of India’s solar sector, which is growing at an unprecedented pace.