By Business India Editorial

Virescent Renewable Energy Trust (VRET), India’s first renewable energy infrastructure investment trust (InvIT) set up by KKR’s Virescent Infrastructure, has raised $62 million (Rs460 crore) from a group of investors led by Canada’s Alberta Investment Management Corporation (AIMCo), a statement from the firms said.

For AIMCo, which is one of Canada’s largest and most diversified institutional investment managers with more than $98 billion of assets under management, this is their first deal in India. Canadian funds have been placing significant India bets as the country fits the risk profile given that green energy markets here have matured from the early risk stage. 

Some of the major Canadian investors in India are Canada Pension Plan Investment Board, Caisse de dépôt et placement du Québec, Brookfield Asset Management, and Ontario Municipal Employees Retirement System (OMERS).

Virescent was set up by KKR in October 2020 to acquire operating renewable energy assets in India. Some of the other clean energy platforms in India backed by private equity investors include Actis Llp’ Sprng Energy and European alternative asset manager EQT and Singapore’s state investment firm Temasek Holdings Pte’s O2 Power.

“VRET’s initial portfolio comprises nine operational solar projects, with an aggregated capacity of approximately 395 megawatt peak (MWp). The assets are located in Maharashtra, Tamil Nadu, Uttar Pradesh, Gujarat, and Rajasthan. Subject to applicable approvals, VRET is in advanced discussions to acquire 55 MWp portfolio from Focal Energy,” said the statement.

Solar and wind generation recorded an all-time high of 43.1 gigawatt (GW) on 27 July, in a reaffirmation of New Delhi’s push for green energy sources. India has reached 38.5 per cent of its installed power capacity from non-fossil fuels and this will go up to 66 per cent by 2030, according to the government.

“VRET is India’s first renewable energy-focused InvIT and one of the few entities in the infrastructure sector to get the highest AAA rating from two rating agencies, CRISIL and India Ratings. We look forward to drawing on the global investment management expertise of our investors as we continue to acquire high-quality assets for achieving our initial growth targets,” said Sanjay Grewal, chief executive of Virescent Infrastructure.

The investment manager of IndiGrid, an infrastructure InvIT sponsored by Sterlite Power Grid Ventures Ltd, is majority owned by KKR. InvITs were also proposed by the government as an alternative fundraising route for state-run companies to manage their funding requirements without having to depend on government support.