AMP Capital has announced it has established a 50/50 partnership with Sterlite Power Transmission for the development of energy transmission projects in India which will be AMP Capital’s first investment in India for its global infrastructure equity strategy.
Under the terms of the deal, AMP Capital and Sterlite Power would each invest an initial amount of approximately US$150 million in the development of four transmission projects, and have put in place debt financing, which would represent a total capital outlay of around US$1 billion.
The projects, which would be expected to have a circuit length of nearly 1800 kilometres of transmission lines across the Western, Southern and North Eastern regions of India, would aim to provide the critical infrastructure and strengthen the power delivery infrastructure in the country, the firm said.
Further to that, the partners may in the future contribute more capital for new inter-state transmission projects expected to be tendered by the government of India which would have the potential to reach an overall investment size of USD $500 million.
“AMP Capital and Sterlite Power believe that this is a unique partnership bringing together operational and investment expertise to support the hitherto under-invested construction phase of power infrastructure in India. Our investment will create a pool of valuable transmission assets, with long-term contractual arrangements and a robust payment security framework, which are extremely attractive to yield-seeking investors,” Sharat Goyal, head of India,infrastructure equity at AMP Capital said.
“India is a key target market for AMP Capital and we have dedicated time and resource to finding a compelling investment opportunity suited to our clients. This investment capitalises on the opportunity presented by the Indian infrastructure sector at this time, as well as benefitting from policy initiatives like Infrastructure Investment Trusts (INVITs) which have created transparent, market-driven exit opportunities for investors willing to invest capital in the development of greenfield infrastructure projects in India.”
