Sembcorp to invest Rs 1,051 cr in IDFC PE's Green Infra

Sembcorp will be channelling its investments in the wind and solar space in India through Green Infra

IDFC Alternatives, the private equity (PE) arm of IDFC, has entered into definitive agreements to sell its controlling stake in Green Infra to Sembcorp Utilities - a wholly-owned subsidiary of Singapore-based Sembcorp Industries. The deal values Green Infra at Rs 4,400 crore.

This transaction will result in IDFC Private Equity Fund II exiting completely and IDFC Private Equity Fund III continuing to hold a significant minority stake in the company with a secured path to exit, including through an initial public offering. The investment marks Sembcorp Group's entry into the fast-growing renewable energy sector in India, said a company statement. Sembcorp will be channelling all its investments in the wind and solar space in India through Green Infra.

Girish Nadkarni, partner, IDFC Alternatives, said, "IDFC Alternatives incubated Green Infra in 2008 to capitalise on India's renewable energy potential and the company has come a long way in the past seven years. Today, the renewables sector is at an inflection point and it is the right time to partner with a large multi-national utility like Sembcorp to take the company to the next level of growth. IDFC Alternatives will work jointly with Sembcorp to capitalise on the immense growth potential of the sector."

Satish Mandhana, managing partner and chief investment officer of IDFC Alternatives, said, "The transaction exemplifies our strategy to identify and invest early in high growth sectors, build a strong and experienced management team with high governance standards, scale up the company and invite a world-class strategic partner to provide timely exit to our investors and also accelerate the growth of the business. The management of Green Infra and IDFC Alternatives have worked closely over the years to build a high-quality, sizeable and sustainable business. We are excited about partnering with Sembcorp in our journey of creating ethical and sustainable businesses."

IDFC Alternatives was amongst the first PE funds to identify the potential of investing in the renewable energy sector in India and seeded Green Infra in 2008, said the company. Over the past seven years, the company has developed an operational portfolio of 516 Mw increasing to 700 Mw in the next few months. In addition, the company has a development pipeline of about 750 Mw.

Sembcorp Industries is a leading energy, water and marine group operating across six continents worldwide, owning 7,200 Mw of power assets.

It also has eight million cubic metres of water a day capacity in operation and under development. It is also present in marine and offshore engineering and urban development.