IDFC exits remaining Green Infra stake for $220m
IDFC Alternatives has exited its remaining stake in Indian wind and solar power producer Sembcorp Green Infra (SGI) to Singapore-based Sembcorp Utilities for INR14.1 billion ($220 million).
The deal will be funded through a combination of debt and Sembcorp's internal capital, and will see Sembcorp take full ownership of SGI. The company bought a 60% from IDFC in 2015 for INR10.6 billion. This facilitated an exit for UK development finance institution CDC and Piramal Group, which had invested in SGI through convertible debt.
IDFC originally incubated SGI, then called Green Infra, through IDFC Private Equity Fund II and IDFC Private Equity Fund III starting in 2008. The former vehicle made a full exit in the 2015 sale, while the latter retained a 40% stake. Speaking to VCCircle, Girish Nadkarni, a partner at IDFC Alternatives, said the firm received a total of INR25 billion through both transactions - its largest exit to date - with an IRR of 19%.
SGI is one of India's largest renewable energy producers, with solar and wind power projects with total capacity of nearly 1,200 megawatts operational and under construction across seven states in India. Sembcorp expects growing demand for wind and solar power in India to complement its existing portfolio of geothermal projects in the country.
SGI claimed a net profit of about S$39 million ($29 million) for the year ended December 2016.
"With the far-reaching energy reforms and electrification underway in India, there is a demand for both renewable and thermal power in the country," Sembcorp India CEO and country head Vipul Tuli said in a statement. "Sembcorp's acquisition of IDFC's stake in SGI strengthens our position as a reliable provider of clean and low-cost power to support India's growing energy needs."
Sembcorp Utilities is a wholly-owned subsidiary of Singapore-listed Sembcorp Industries. The parent company has 11,000 megawatts of power capacity globally and a daily capacity of nearly 9 million cubic meters of water in operation and under development.
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