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01 October 2023

Taqa-led group to acquire 2 Indian power plants

By Wam

A consortium led by Taqa, the international energy and water company from Abu Dhabi, has agreed to acquire two hydro-electric plants in India, making Taqa the largest private operator of hydro-electric plants in India.

The agreement 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 $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.

The consortium agreed to purchase the Baspa Stage II and Karcham Wangtoo plants in the northern state of Himachal Pradesh, from Jaiprakash Power Ventures Limited, a subsidiary of Indian infrastructure conglomerate, Jaypee Group.

Taqa, which holds a 51 per cent stake in the consortium, 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 per cent) and IDFC Alternatives’ India Infrastructure Fund II (10 per cent).

The equity invested by the consortium in the acquisition of the two hydro-electric plants will amount to approximately $616 million, of which 51 per cent is from Taqa. The consortium will also acquire the assets’ non-recourse project debt.

Frank Perez, Taqa’s Executive Officer and Head of Global Power and Water, said, "India’s economic growth depends on having ample and reliable energy supply. 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 two plants have a combined power generation capacity of 1,391 megawatts. Both plants are located in Kinnaur district within 2km of each other and share support facilities. They use run-of-the-river technology to convert natural water flow to electricity, eliminating the need for a reservoir. The plants are 35km from the Sorang hydro-electric plant, in which Taqa acquired a stake last year.

Following the completion of the transaction, Taqa’s gross operational power generation capacity in India will total 1,741 MW, comprised of three hydro-electric facilities and one lignite power plant.

The acquisition is expected to close in 2014 and is subject to regulatory and third party approvals.

This investment will be recognised at the second meeting of the UAE-India High Level Joint Task Force in Mumbai on Monday March 3 co-chaired by Sheikh Hamed bin Zayed Al Nahyan, Chairman of the Abu Dhabi Crown Prince’s Court, and Anand Sharma, India’s Minister of Commerce and Industry.