The Mahindra Group and the Ontario Teachers’ Pension Plan Board (Ontario Teachers’) have collaborated as co-sponsors for an infrastructure investment trust (InvIT). This InvIT known as the Sustainable Energy Infra Trust (SEIT) is strategically designed to encompass a diverse portfolio of assets within the burgeoning renewable energy sector. Together, these two entities aim to leverage their collective expertise and financial resources to fortify the InvIT, ensuring its efficacy as a robust investment vehicle in the dynamic landscape of sustainable and clean energy initiatives.
The Sustainable Energy Infra Trust (SEIT), identified as one of India’s foremost investment trust in the realm of renewable energy, asserts its distinction, as articulated in a joint statement. Having premiered on the National Stock Exchange on September 15, the trust has successfully garnered an impressive primary capital amounting to ₹1,365 crore ($165 million) through its inaugural unit offering. SEIT has diverse pool of investors, comprising both global and Indian entities, with participation from esteemed institutions such as the Asian Infrastructure Investment Bank (AIIB).
As previously disclosed, the joint commitment of Mahindra Group and Ontario Teachers’, Sustainable Energy & Infrastructure Trust (SEIT) has been established with the primary objective of fostering substantial growth within the renewable energy sector in India.
SEIT, established with operational renewable power assets initially provided by Mahindra Susten, boasts an impressive generation capacity of approximately 1.54 GWp.
The infusion of a capital sum amounting to ₹897.8 crore (equivalent to $108 million) through the offer for the sale of SEIT units marks a significant financial milestone for Mahindra Susten. This substantial capital injection is poised to strategically elevate Mahindra Susten, propelling it towards a new echelon of growth and fostering the development of an extensive future pipeline of renewable energy assets.
As a strategic element of their expansion plan, Mahindra Susten and SEIT have initiated a Right of First Offer (ROFO) arrangement, ensuring compliance with InvIT regulations.
Under this agreement, Mahindra Susten will present renewable energy assets it develops for sale to SEIT, reflecting a collaborative effort aimed at bolstering their growth trajectories.
The commitment of both the Mahindra Group and Ontario Teachers’ to invest substantial amounts, with a commitment of up to ₹3,050 crore ($368 million) and ₹3,550 crore ($428 million) respectively into Mahindra Susten and SEIT, reflects the robust financial backing and confidence in the potential success of this venture.
Anish Shah, the Group Chief Executive Officer (CEO) & Managing Director (MD) of Mahindra Group, stated that the Government of India has set ambitious targets to reduce the carbon intensity of the nation’s economy by 45% by the end of the decade and achieve net-zero carbon emissions by 2070.
He had also mentioned that Mahindra Susten has ambitious plans to achieve 5X growth in the next five years and will contribute to both the group’s and the nation’s green energy goals. Anish Shah expressed excitement about the renewable energy sector’s continuous growth, attracting investments, and emphasized the roles of both Susten and SEIT in developing the right ecosystem.
Deb Hajara, Managing Director of Infrastructure & Natural Resources at Ontario Teachers’, expressed pride in co-sponsoring SEIT alongside their partner Mahindra Susten and contributing to India’s renewable energy ambitions. She mentioned that this milestone reinforces their commitment to investing globally in green and transition assets, showcasing the attractiveness of renewable energy investment opportunities in India.
Avinash Rao, Chief Executive Officer of the Investment Manager at SEIT, remarked that renewable energy is a core sector for India with substantial growth potential. He noted that the government’s emphasis on renewable and sustainable energy makes the industry appealing for investments, facilitating further portfolio growth. Avinash Rao expressed delight in having strong sponsors like Mahindra Group, Ontario Teachers’, as well as AIIB and other prominent investors on board for current assets and for building their pipeline of future assets.
