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Canadian pension fund Ontario Municipal Employees’ Retirement System (OMERS) is eyeing the electricity distribution companies (discoms) of Union territories (UT), and power transmission assets as part of its strategy to capture value across India’s power sector, Prateek Maheshwari, managing director, Asia, OMERS Infrastructure, said in an interview.

In line with the growing interest in India’s infrastructure space from large pension funds, OMERS is also eyeing digital infrastructure and opportunities in businesses such as towers, fibre and data centres.

With net assets of over C$105 billion, OMERS had recently announced its plan to purchase a 19.4% stake in NYSE-listed Azure Power Global Ltd for $219 million. It is also making aggressive bets in India’s infrastructure space and invested $121 million for a 22.4% stake in IndInfravit Trust, which has a portfolio of 13 operational road concessions. “The overarching theme is definitely that, as an organisation, we want to increase our exposure to Asia, and India forms a very key component of the overall Asia strategy," Maheshwari said.

In May, OMERS Administration Corp. was among a few pension funds to receive income tax exemption for infrastructure investments in India before March 2024.

Some of the major Canadian investors in India are Canada Pension Plan Investment Board, Caisse de dépôt et placement du Québec and Brookfield Asset Management.

In response to a query on new investment areas that OMERS is looking at in India, Maheshwari said: “There are still categories within infrastructure which are interesting as the whole (electricity) transmission side of the country needs massive investments."

In a reaffirmation of New Delhi’s push for green energy sources, solar and wind generation recorded an all-time high of 43.1 gigawatts (GW) on 27 July. “It links into the fundamental growth drivers of the country for electricity and if the electricity is going to come from renewable sources that needs a fundamental upgradation of the grid to manage the intermittency and to manage the frequency, balancing, etc. So, the whole transmission side of things is interesting," he added.

Large battery storages can help the electricity grids, given the intermittent nature of electricity from clean energy sources such as solar and wind.

There is growing traction for India’s playbook for developing a battery storage ecosystem. Reliance Industries Ltd said it will set up an advanced energy storage Gigafactory. The government also plans to call bids to build 4GWh of a grid-scale battery storage system at regional load dispatch centres. State-run NTPC Ltd has also floated a global tender for setting up 1GWh grid-scale battery storage system. “We will also look at the discoms," Maheshwari said.

The government has rolled out privatization of discoms in eight UTs, with Eminent Electricity Distribution Ltd, a subsidiary of Kolkata-based CESC Ltd, placing the highest bid of 871 crore to acquire the electricity distribution business for Chandigarh. Torrent Power placed the highest bid for power discoms of Dadar and Nagar Haveli, and Daman and Diu.

The requests for proposal for the Andaman and Nicobar Islands and Puducherry are being finalized.

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