EQT, Temasek launch $500 mn renewable energy platform

European alternative asset manager EQT and Singapore’s state investment firm Temasek Holdings Pte. on Wednesday announced that they have jointly set up O2 Power, a $500-million renewable energy platform in India.

O2 Power will target more than four gigawatts (GWs) of installed capacity across solar and wind projects, comprising both greenfield projects, as well as mergers and acquisitions, the companies said in a joint statement.

This would be EQT Infrastructure’s first investment in India. EQT is investing in the platform through its EQT Infrastructure IV fund. With this transaction, EQT Infrastructure IV is expected to be 60-65% invested.

The investment is in line with EQT’s thematic approach to invest in sustainable solutions, guided by the United Nations’ Sustainable Development Goals, the statement said. The platform will be headed by Parag Sharma as chief executive.

“India presents significant investment opportunities being the second largest renewable energy market in the world and EQT is delighted about teaming up with Temasek and O2 Power. CEO Parag Sharma and his management team have a successful track record and EQT looks forward to work together in creating a future-proofed renewable energy platform,” said Fabian Gröne, partner, EQT Partners, and investment advisor to EQT Infrastructure.

Stockholm-based EQT is a global investment organization with more than €62 billion in raised capital and around €41 billion in assets under management across 19 active funds. EQT funds have portfolio companies in Europe, Asia and the US.

“We seek opportunities to invest in solutions that contribute to a better and more sustainable world. The partnership with EQT to establish O2 Power is consistent with our focus on sustainable living and, in particular, the development of eco-conscious energy solutions,” said Nagi Hamiyeh, joint head, investment group, Temasek.

With O2 Power, EQT and Temasek join several other foreign investors who have set up investment platforms in India to either develop or acquire renewable energy projects.

Last year, Piramal Enterprises Ltd tied up with Canada’s largest pension fund manager, Canada Pension Plan Investment Board (CPPIB), to co-sponsor India’s first renewable energy-focused infrastructure investment trust (InvIT). The proposed InvIT will have an initial targeted corpus of up to $600 million with an option to scale up further and will seek to acquire up to 1.5-2 GWs of cash-generating renewable assets solar and wind assets.

CPPIB is also an investor in ReNew Power, one of the largest renewable energy producers in the country, having invested $391 million in the company in 2018.

Another Canadian pension fund manager Caisse de dépôt et placement du Québec (CDPQ) too has made significant investments in the Indian renewable energy sector with investments in CLP India and Azure Power Global Ltd

GIC and Abu Dhabi Investment Authority own Greenko Group, a major renewable energy producer. In 2019, the two sovereign funds invested over $800 million into the company.