OMERS Infrastructure announced that it has signed a stock purchase agreement to acquire a 19.4% stake in Indian independent power (solar) producer Azure Power Global for $219 million from International Finance Corporation (IFC) and IFC GIF Investment Company.

Azure Power, an India-based renewable energy company, has a 2 GW of operational renewable capacity, and 5 GW of renewable capacity is in the pipeline or awarded, the company said in a press statement.

The transaction is expected to be completed by August 2021. Ambit Private Limited acted as a financial advisor of OMERS Infrastructure.

According to OMERS Infrastructure, the company has over 2 GW of operational renewable energy capacity across the globe, including Leeward Renewable Energy, a renewable energy company that owns and operates 22 renewable energy facilities across nine states in the United States.

Annesley Wallace, Executive Vice President and Global Head of OMERS Infrastructure, said, “This agreement to invest in Azure Power demonstrates OMERS’ strong global interest in high-quality renewable power and energy transition assets as well as our interest in India as an investment destination and Asia-Pacific more broadly.”

“This transaction directly supports our mission of building a strong portfolio of well-run assets that will help pay pensions to our members over the long term,” Wallace added.

Prateek Maheswari, Managing Director, Asia, OMERS Infrastructure, said, “The closing of this transaction would mark our second direct infrastructure investment in India, following our 2019 investment in the IndInfravit toll road platform.”

According to Mercom’s India Solar Project Tracker, Azure Power has 2 GW of operational solar capacity and 5.2 GW of capacity in the pipeline as of June 2021.

Recently, Azure Power signed a binding agreement to sell its non-core rooftop solar portfolio to Radiance Renewables for ₹5.36 billion (~$73.5 million). Radiance is a 100% subsidiary of the Green Growth Equity Fund (GGEF), India’s leading Climate fund managed by EverSource Capital.

In March 2020, Caisse de dépôt et placement du Québec (CDPQ), one of Canada’s leading institutional investors, acquired an additional 717,701 shares from a shareholder of Azure Power. With this transaction, CDPQ now owns 24,259,272 shares of Azure which represents 50.9% of the total outstanding shares of the power producer.

According to Mercom’s 1H and Q2 2021 Solar Funding and M&A Report, solar corporate M&A activity has taken off this year globally and is on pace for one of the best years to date. Solar M&A transactions for the first half of the year were at a record high since 2014. In 1H 2021, there were 54 solar M&A transactions compared to 25 transactions in 1H 2020. Most of the companies acquired were downstream companies.

Image credit: Azure Power