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3i India Fund invests $182m in hydro developer GVK Energy

9 Nov 2010

Infrastructure private equity investor 3i has gained a minority stake in GVK Energy, a subsidiary of Indian developer GVK Power and Infrastructure, with a $182m investment.

The investment was made through the firm’s $1.2bn India-focused fund, 3i India Infrastructure Fund, alongside a $78m contribution reported to come from Actis, for a combined 21 per cent stake.

Through the investment, 3i acquires a stake in GVK Energy’s power portfolio, which includes the 330MW Shrinagar hydropower project currently under development 110 km from Rishikesh in the Indian state of Uttarakhand.

The developer is aiming to develop 1,000W of power projects over the next three to five years, and already has two hydropower plants under development totalling 1,060MW.

This includes the 370MW Mapan – Sirkari project on the river Goriganga that it was granted by the Government of Uttarakhand in 2005.

The government of Jammu Kashmir this year also awarded the company the Ratle Power hydro project following a competitive bid, which involves implementing a large 690MW hydro electric on the river Chenab.

GVK chairman G V Krishna Reddy, said, ‘GVK has been a pioneer in the infrastructure sector in India, having developed India’s first independent power project.

‘Today we are poised to significantly grow our energy business to meet the growing demand in India. This transaction is an indicator of GVK’s ability to create value in its businesses for the benefit of our stakeholders.’

3i India Infrastructure Fund was established to invest in a diversified portfolio of infrastructure investments in India, focusing on the port, airport, road and power sectors.

Head of 3i Asia, Anil Ahuja, said, ‘GVK is well positioned to take advantage of the demand for power in India, which is growing strongly. This investment allows us to take a stake in a portfolio of power projects with an operator with one of the best track records in the country.’

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