KKR-backed firm raises Rs 460 crore in India's first renewable InvIT

Virescent Renewable Energy Trust was floated in February this year by Virescent Infrastructure, which was set up in 2020 and is backed by global investment firm KKR

India’s first and only renewable energy InvIT (Infrastructure Investment Trust) Virescent Renewable Energy Trust (VRET) has raised Rs 460 crore from foreign and domestic investors in its first round of funding.
 
VRET was floated in February this year by Virescent Infrastructure, which was set up in 2020 and is backed by global investment firm KKR.
 
“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. Our endeavour is to support the government in achieving its medium- and long-term renewable energy objectives of 175 GW and 450 GW, respectively,” Sanjay Grewal, CEO, Virescent Infrastructure, said.

 

Finance Minister Nirmala Sitharaman in her Budget speech on February 1 allowed tax exemption on debt financing of InvITs by foreign portfolio investors.
 
VRET’s initial portfolio comprises nine operational solar projects, with an aggregated capacity of 395 MW. These projects are located in Maharashtra, Tamil Nadu, Uttar Pradesh, Gujarat and Rajasthan. The company said it was in “advanced discussions'” to acquire a 55-MW portfolio from Focal Energy.
 
The company had earlier said it will expand its portfolio by identifying investment opportunities that have stable cash flows stemming from long-term contracts with state and central government counterparties across India.

 
Hardik Shah, managing director, KKR Infrastructure, said, “Virescent continues to be an important part of their infrastructure strategy in the Asia Pacific.” “We contribute purposefully to India’s ambitious targets in the renewables sector. Investing in VRET alongside AIMCo and other institutional investors will help us capitalise on this huge market opportunity,” Shah said.
 
Alberta Investment Management Corporation, one of Canada’s largest institutional investment managers, led the transaction, said VRET in a statement.
 
Ahmed Mubashir, director, Infrastructure & Renewable Resources at AIMCo, said, “VRET’s portfolio of operating renewable energy assets whose economics are underpinned by long-term power purchase agreements are well aligned with our clients’ investment objectives. We look forward to partnering with KKR and Virescent to further grow the platform and provide renewable energy solutions to India in the coming years.”

 
AIMCo is one of Canada’s largest institutional investment managers with more than CAD $123 billion of assets under management, as on June 30, 2021.