Canada’s CDPQ, SWFs from Oman & Kuwait to light up Tata Power-ICICI Venture’s JV

Canada-based pension fund Caisse de depot et placement du Quebec, along with other sovereign wealth funds (such as the State General Reserve Fund of Oman and Kuwait Investment Authority), is in advanced stages of negotiation to form a joint venture (JV) with 2 Power Company Limited and ICICI Venture Funds Management Company, to buy out stressed power assets in India that are facing high debt, regulatory uncertainties, fuel shortages and low demand. The JV is likely to have investments aggregating $650 million of equity towards a pool of $850 million. Further, there are plans to raise additional debt to create a war chest of $4 billion-$5 billion to fund large buyouts. Reportedly, Avantha Power & Infrastructure Limited’s 1,200 MW Jhabua thermal power plant, entailing an estimated enterprise valuation of Rs 40 billion-Rs 45 billion, is likely be the first acquisition by the JV.