An Abu Dhabi National Energy Company (TAQA)-led consortium has agreed to acquire two hydroelectric power plants from Jaiprakash Power Ventures Limited, a subsidiary of Indian infrastructure conglomerate Jaypee Group.
The consortium will purchase the Baspa Stage II and Karcham Wangtoo plants in the northern state of Himachal Pradesh.
With a combined power generation capacity of 1,391MW, the two plants are located in Kinnaur district within 2km of each other and share support facilities.
TAQA holds a 51% stake in the consortium and it will have control of operations and management of both facilities under the proposed agreement.
The equity invested by the consortium in the acquisition will amount to approximately INR38.2bn (€448m), of which 51% is from TAQA. The remaining equity will be held by one of Canada's institutional investors (39%) and IDFC Alternatives' India Infrastructure Fund II (10%).
TAQA executive officer and head of global power and water Frank Perez said that economic growth of India relies on having ample and reliable energy supply.
The power plants will use run-of-the-river technology to convert natural water flow to energy, eliminating the need for a reservoir.
The acquisition, which is subjected to regulatory and third party approvals, is estimated to close in 2014.
Once the transaction is complete, TAQA's gross operational power generation capacity in India will be 1,741MW.
The new agreement follows the UAE-India Bilateral Investment Promotion and Protection Agreement signed in December 2013.
Image: TAQA to acquire two hydroelectric power stations in India. Photo: courtesy of Vichaya Kiatying-Angsulee/ FreeDigitalPhotos.net.