Mumbai: Blackstone Group LP will invest Rs 500 crore ($111 million) in Indian power producer VISA Power, the private equity firm said on Wednesday, in a deal that underscores growing investor interest in India’s infrastructure building.
VISA Power, a part of diversified $1.1 billion VISA Group, has a 1,200 megawatts captive coal-fired power plant, which is in an advanced stage of development, in the central Indian state of Chhattisgarh, Blackstone said in a statement.
It did not disclose how much the stake would be.
Financing much-needed infrastructure projects through private equity investors has been growing in a country infamous for clogged roads and power outages and lacking a mature local bond market to provide long-term project funding.
Private equity investment in infrastructure in India grew to $4 billion last year from about $1 billion in 2006, a recent Bain & Company report found, predicting activity could expand 25-50% annually over the next three years.
A group of investors including Morgan Stanley’s infrastructure arm, Goldman Sachs and General Atlantic last year invested $425 million in Asian Genco Pte Ltd, which has stakes in power generation assets in India.
Blackstone has appetite to invest up to $1 billion in India’s power sector over next three to five years, its India head, Akhil Gupta, had said last August.
The private equity firm last year agreed to invest $300 million in unlisted Indian energy firm Moser Baer Projects Private Ltd, owned by the founder of Moser Baer India .
Earlier this month, Blackstone said it would invest $34 million in FINO, an Indian technology solutions provider for banks, microfinance institutions and insurance companies.