Canada’s CDPQ ups Azure Power stake to 40% with $100m fresh infusion

Photo: Bloomberg

Canadian pension fund manager Caisse de depot et placement du Quebec (CDPQ) on Wednesday announced that it has increased its stake in NYSE-listed Azure Power Global Ltd. to 40 per cent by infusing $100 million in the company’s recent capital raising.

With the new investment, CDPQ’s total investment in the Indian solar power producer stands at $240 million, it said in a statement.

Azure Power Global completed an underwritten public offering of 14,800,000 equity shares at $12.50 apiece to raise up to $185 million over a week ago. CDPQ Infrastructure Asia Pte Ltd. bought 8 million shares in the offering for $100 million, and currently holds 16,443,567 shares or 40.3 per cent in the company. The offering may also see IFC GIF Investment Company I and International Finance Corporation (IFC) subscribe to $40 million and $10 million respectively, as per media reports.

“Azure Power is a leader in the fast-growing sector of solar power in India, a priority market for CDPQ. This transaction fits perfectly with CDPQ’s desire to contribute, as an investor, to a global low-carbon economy,” said Emmanuel Jaclot, executive vice-president, infrastructure at CDPQ.

Founded in 2008 by entrepreneur Inderpreet Wadhwa, Azure Power sells energy to government utilities, and independent industrial and commercial customers in India. The company has a pan-Indian portfolio of more than 3 gigawatt spread across 23 Indian states.

In 2015, IFC invested up to $111 million in Azure for its 130-megawatt solar power plant in Karnataka. The investment included a loan of up to $31 million and a syndication of a parallel loan of up to $80 million. In June, IFC proposed to invest up to $135 million in the solar power company, involving debt financing of up to $45 million and mobilisation of senior loans of up to $90 million.

CDPQ is a long-term institutional investor that manages funds primarily for public and parapublic pension and insurance plans. Globally, it invests in major financial markets, private equity, infrastructure, real estate and private debt. As at 30 June 2018, CDPQ held CA$308.3 billion in net assets.

In September, CDPQ also signed an agreement to acquire a 40 per cent stake in CLP India for about $365 million in cash. CLP India, a wholly-owned subsidiary of Hong Kong-based CLP Holdings, is one of the largest renewable energy producers in India with operational and committed capacity of around 1100 MW across wind and solar projects.