Some of the world’s biggest pension funds, seeking longterm returns on green investments, are scouting for deals in India’s solar power sector, where Prime Minister Narendra Modi is targeting $100 billion investment in the next five years.
According to The Reuters, power demand in Asia’s third-largest economy is set to surge as economy grows and more people move into cities. India estimates peak electricity demand will more than quadruple in the next two decades to 690 gigawatt (GW), which would require rapid growth in generation and transmission capacity.
That potential, helped by cheaper solar material costs and government efforts to curb pollution, is drawing global investors, including Canada’s top pension fund managers — Canada Pension Plan Investment Board (CPPIB), Caisse de depot et placement du Quebec (CDPQ), and Ontario Teacher’s Pension Plan (OTPP).
Investors’ focus is primarily on solar power generation, funding large-scale solar parks. CDPQ, which has $199 billion in net assets, says it plans to invest in India’s solar sector with Azure Power, a New York-listed firm with about 1 GW of solar capacity under various stages of development.
Other international investors have already entered India’s renewable energy sector, such as Dutch fund manager APG, Canada’s Brookfield Asset Management, the private equity arms of Goldman Sachs, JPMorgan and Morgan Stanley, and European utilities EDF, Engie and Enel.
