Shapoorji Pallonji Inks Pact with KKR to Sell 5 Solar Assets for about $204 Mn

Shapoorji Pallonji Group’s infrastructure development arm, Shapoorji Pallonji Infrastructure Capital (SP Infra) has entered into the definitive sale agreements with KKR, a global investment firm, for its 5 operational solar energy plants with a capacity of 317 MWp in consideration of about Rs 15,540 million (~ USD 204 million).

The development came after months of negotiations between the two companies, and will likely to help Shapoorji Pallonji Group in reducing its debt burden.

Further, the company’s 5 solar assets portfolio having an aggregate capacity of 317 MWp comprised of 169 MW (DC) in Maharashtra and 148 MW (DC) in Tamil Nadu.

India is a key part of KKR’s Asia infrastructure strategy, and this transaction is its second investment in India as part of the strategy.

Commenting on the deal, David Luboff, Head of Asia Pacific Infrastructure at KKR, said that “we are truly pleased to extend our infrastructure franchise in Asia and India through this investment in a world-class portfolio of fully operational solar energy projects. Given the growing demand across Asia Pacific for sustainable energy solutions, we also see this as a great example of how KKR can bring capital and expertise to assets to help meet the demand for infrastructure development.”

On the future investment plans for India, Luboff added that “looking ahead, we are excited to explore even more renewable energy opportunities in India and overseas.”

SP Infra is having assets and businesses in the renewable and gas-based power, highways, port and terminals in India and overseas markets.

“This deal further demonstrates SP Infra’s continued track record of developing high-quality infrastructure assets in its chosen spaces, creating value for further growth in its businesses, and be the partner of choice for high-quality international investors like KKR,” said Mukundan Srinivasan, Managing Director of SP Infra.

However, the further details of the investment have not been disclosed by the company, and the transaction is subject to customary approvals.

Speaking on the transaction, Sanjay Nayar, CEO of KKR India, added that “SP Infra and the Shapoorji Pallonji Group are recognized in India and worldwide for the high quality of their renewable energy projects, and given the government’s ambitious target of achieving 175GW of renewable energy capacity by 2022, we believe this is an attractive time to invest in this portfolio and provide even greater solar energy solutions to communities across India.”

Recently, SP Infra has sold 194 MW of its operating solar assets to Sprng Energy, a renewable energy platform in India by London-based private equity firm Actis.

In another significant development, credit rating agency, India Ratings & Research, has recently withdrawn the Sterling & Wilson Solar (SWSL), a Shapoorji Pallonji Group company, rating after it has fully repaid the Commercial Papers issued under the programme and there is no outstanding CP as on date.