KKR Backed Virescent Infra InvIT Raises Rs 460 Crores

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Virescent Infrastructure, the renewable energy platform sponsored by global investment firm KKR, has set up India’s first renewable energy infrastructure investment trust (“InvIT”), Virescent Renewable Energy Trust (“VRET”). VRET has raised Rs 460 crores (US$62 million) from a group of foreign and domestic investors. Leading the transaction, on behalf of its clients, is Alberta Investment Management Corporation (“AIMCo”), one of Canada’s largest institutional investment managers.

KKR set up Virescent in October 2020 to acquire operating renewable energy assets in India. This comes at a time where renewables is set to play an increasingly critical role in powering India’s energy needs and estimated to make up 60% of India’s installed power capacity by 2030. KKR invests in VRET from its Asia Pacific Infrastructure Investors Fund.

VRET’s initial portfolio comprises of nine operational solar projects, with an aggregated capacity of approximately 395 MWp. The assets are located in Maharashtra, Tamil Nadu, Uttar Pradesh, Gujarat and Rajasthan. In addition, subject to applicable approvals, VRET is in advanced discussions to acquire 55MWp portfolio from Focal Energy.

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VRET has been assigned a ‘AAA/Stable’ rating for its loan facilities from CRISIL and India Ratings, S&P and Fitch’s India affiliates, respectively. The ‘AAA’ rating considers the portfolio to grow up to 2 GWp over the next two to three years.

Sanjay Grewal, CEO, Virescent Infrastructure, said, “This incredible achievement is an important milestone in Virescent’s journey. VRET is India’s first renewable energy focused InvIT and one of the few entities in the infrastructure sector to get the highest ‘AAA’ rating from two rating agencies, CRISIL and India Ratings. We look forward to drawing on the global investment management expertise of our investors as we continue to acquire high-quality assets for achieving our initial growth targets. .”

Hardik Shah, Managing Director, KKR Infrastructure, said, “Virescent continues to be an important part of our infrastructure strategy in Asia Pacific and how we contribute purposefully to India’s ambitious targets in the renewables sector. Investing in VRET alongside AIMCo and other institutional investors will help us to capitalise on this huge market opportunity. We will continue to support Virescent and its management team in providing greater renewable energy solutions to communities across India.”

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Ahmed Mubashir, Director, Infrastructure & Renewable Resources at AIMCo, said, “AIMCo is excited to expand its geographic footprint in Asia through its investment in India’s first renewable energy InvIT. VRET’s portfolio of operating renewable energy assets whose economics are underpinned by long-term power purchase agreements are well aligned with our clients’ investment objectives. We look forward to partnering with KKR and Virescent to further grow the platform and provide renewable energy solutions to India in the coming years.”

Axis Capital acted as the lead manager to the issue. Shardul Amarchand and E&Y acted as the legal advisors and tax advisors, respectively to the issue.

Indigrid has been the first power InvIT in India, and has also acquired some solar assets. Tata Power had also announced plans for one, before deferring it for some time.