IndiGrid ties up with BII, Norfund to rev up green energy transmission

KKR-backed power sector infrastructure investment trust IndiGrid has tied up with two marquee global financial investment funds and a leading engineering, procurement, and construction (EPC) firm to jointly develop interstate transmission system projects.

UK development financer British International Investment (BII), Norwegian climate investment fund Norfund, and Techno Electric and Engineering Co. Ltd (Techno) will collectively develop IndiGrid’s greenfield interstate transmission system (ISTS) projects, the company said in a statement.

BII and Norfund (through KNI India AS, Norfund’s joint venture with KLP, Norway’s largest pension firm) will invest in IndiGrid’s three ISTS projects, including Ishanagar Power Transmission Ltd (IPTL), Dhule Power Transmission Ltd (DPTL), and Kallam Transco Ltd (KTCO), which were awarded last year and are currently under construction.

These projects are expected to support more than 6 gigawatt (GW) of renewable energy generation in Madhya Pradesh and Maharashtra. Additionally, Techno will co-develop the IPTL and DPTL projects. Techno will invest minority capital and be responsible for the complete execution of the projects on a turnkey basis.

Once these projects are operational and revenue-generating, IndiGrid, which has assets under management of more than ₹293 billion (about $3.5 billion), will acquire the entire stake.

In April, IndiGrid operationalized its first greenfield ISTS project, Kallam Transmission, and won five more projects across ISTS and battery energy storage system (BESS). A tentative capex outlay of more than ₹2,000 crore will be deployed over the next 12-24 months, it said.

Harsh Shah, chief executive officer and director of IndiGrid, said, “On the back of India’s commitment to energy transition and grid parity across renewable energy technologies including BESS, we are witnessing tremendous investment opportunities in our target areas. This offers a compelling prospect for investors with preference for sustainability.”

“We are delighted to partner with marquee development financial institutions like BII and Norfund for our current under-construction projects to realize a shared vision of making an impact in the energy transition journey,” he added.

Rohit Anand, head of infrastructure equity for Asia at British International Investment, said, “India requires a substantial investment of  ₹4.75 trillion in the transmission sector to facilitate integration of renewable energy capacities and meet its decarbonisation goals. As a long-term partner and committed climate finance provider to India, we are delighted to bring not just our capital but also our ESG expertise to support the transmission sector which is a vital part of India’s energy transition.”

Bjørnar Baugerud, head of climate investment fund at Norfund, said, “Huge investments are needed in the Indian transmission infrastructure to facilitate the government’s ambitious climate goals and speed up the energy transition. Through this investment and our new partnership, we are happy to be able to contribute to connecting new renewable energy capacity to the national grid and achieve the country’s 500 GW of renewable capacity target.”

Eric Nasby, an investment analyst at KLP, said, “With a rapidly growing economy, India has a rising need for access to renewable energy to produce electricity. We expect this partnership to have a strong climate impact and generate attractive returns for KLP and its owners.”

“As a pioneer and leader in the energy transmission sector, Techno is immensely proud and honored to collaborate with IndiGrid, BII, and Norfund in advancing India’s transmission story. This partnership represents a significant milestone for us, reflecting our commitment to transforming India’s energy landscape,” Techno Electric chairperson Padam Prakash Gupta said.

IndiGrid owns 41 power projects with more than 22,550 MVA transformation capacity and 855 MWAC (more than 1 GWp) of solar generation capacity.

BII has investments in over 1,580 businesses across 65 countries and total net assets of £8.5 billion in Africa, Asia, and the Caribbean. Between 2022 and 2026, at least 30% of BII’s total new commitments by value will be in climate finance.