Ontario Teachers’ Pension Plan to buy 30% stake in India’s Mahindra renewables assets for around $300 million

Pension and infrastructure funds often buy stakes in renewable energy generation projects, tempted by the predictable long-term returns.

The Ontario Teachers' Pension Plan Board is an independent organization responsible for administering defined-benefit pensions for school teachers of the Canadian province of Ontario. Ontario Teachers' also invests the plan's pension fund, and it is one of the world's largest institutional investors.

Ontario Teachers’ Pension Plan Board has agreed to acquire a 30% stake in Indian solar installer Mahindra Susten Pvt Ltd, a unit of automotive group Mahindra & Mahindra, in a deal with an equity value of USD 397.1m/EUR 298m.

On Friday, the Canadian pension fund said it has sealed binding agreements for the purchase and agreed to establish an infrastructure investment trust (InvIT) with its Indian partner.

Mahindra Group may offload an additional 9.99% stake in the solar engineering, procurement and construction (EPC) firm to Ontario Teachers’.

The potential deal could be executed by May 31, 2023, with funds from it to be channelled into the InvIT unit.

“The partnership with Ontario Teachers’ will enable the Mahindra Group to unlock value in the renewable energy sector with continued joint investments towards accelerated growth,” said Puneet Renjhen, Member of Group Executive Board and EVP, Partnerships & Alliances at Mahindra Group.

Ontario Teachers expects to wrap up the acquisition over the next few months. The creation of the InvIT is pending regulatory clearance and is expected to be finalized in fiscal 2024.

Pension and infrastructure funds often buy stakes in renewable energy generation projects, tempted by the predictable long-term returns.

Earlier this year, Reuters reported that OTTP had agreed to invest up to $1 billion in a new offshore wind business launched by Australia’s Macquarie Group Ltd, to develop projects worldwide.

Edited from source material written by Veselina Petrova of RenewablesNow.

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