Essar Power Limited, a part of the Essar Group, has successfully raised Rs350 crore from IDFC Project Equity for part financing the equity for its ongoing projects.
Essar Power, one of the major players in the Indian power sector, currently operates three power plants – two in Hazira with generating capacity of 515 MW and 500 MW each and one in Vadinar with a capacity of 125 MW.
The company is currently implementing four power projects which are under various stages of construction. These include a project at Salaya in Gujarat, cogeneration power plant at Vadinar in Gujarat, coal pithead project at Mahan in Madhya Pradesh and at Tori in Jharkhand. All the projects are scheduled to be completed over the next three years, pursuant to which the total capacity of Essar Power would increase to about 6000 MW.
''Essar has followed a conscious strategy of creating a balanced portfolio of power projects - across fuel sources, geographic locations and customer base. We are happy that IDFC Project Equity is partnering with us in our vision for growth. This investment by IDFC clearly indicates that projects with strong business fundamentals can still attract investment even during these challenging times,'' Anshuman Ruia, director, Essar Group, said on the occasion.
This is the first investment made by IDFC Project Equity since the initial closing of the India Infrastructure Fund managed by it, according to MK Sinha, its president and CEO.
''We find the power sector particularly attractive and are delighted to partner with a strong and credible group like Essar for our first large investment in this sector since the initial fund close in June 2008. Essar is one of the very few groups in India who have demonstrated experience in successfully setting up and operating power plants,'' Sinha said.
''Currently the group in its power business has operational generating capacities of 1140 MW and is implementing four new power projects which have made significant progress and are expected to be completed over the next three years. What we particularly like about this investment is out partner's credible and measured project development and execution plans,'' he added.
''We are excited about our first large investment with the Essar Group in its power business. We believe that the group is well positioned to capitalise on the opportunities in the Indian power sector and leverage its inherent large scale project implementation expertise. The management team at Essar Power is one of the most experienced and proactive in the sector today and we look forward to working with them towards realizing their vision of becoming one of the country's largest private sector power producers,'' said Aditya Aggarwal, principal, IDFC Project Equity, who was the lead transactor on the deal.
Essar has been in power generation for over more than a decade. It is the first independent power producer after the power sector was liberalised in early 1990s. With a licence to enter the transmission, distribution and power trading segments, Essar Power is now a fully integrated, end-to-end player in the power sector.
IDFC Project Equity Company Limited is one of the leading infrastructure equity investment managers in India. It manages the India Infrastructure Fund (IIF), a SEBI-registered domestic venture capital fund focused on long-term equity investments in a diversified portfolio of infrastructure projects in India.
IIF has been set up as part of the 'India Infrastructure Financing Initiative', a collaborative effort between the Government of India and leading Indian and global financial institutions to deploy $5 billion in capital for infrastructure projects in India. The current corpus of IIF is $875 million with investor commitments from institutional investors in India, the US, Canada, Europe, Japan and the Middle-East.