Abu Dhabi, United Arab Emirates (4E) – A consortium led by the Abu Dhabi National Energy Co., also known as Taqa, has purchased two hydroelectric power plants from Jaypee Group for $1.6bn, marking the latest move by an Indian company to unload assets due to economic difficulties in Asia’s third-biggest economy.
The deal comes following the signing of Bilateral Investment Promotion and Protection Agreement in December 2013 between the United Arab Emirates and India, and a commitment made by the Gulf nation to invest $2bn worth of infrastructure projects in India during a meeting held in Abu Dhabi in February last year.
The consortium, which Taqa holds a 51 percent stake, agreed to buy from Jaypee Group subsidiary Jaiprakash Power Ventures Limited the Baspa Stage II and Karcham Wangtoo plants in the Himachal Pradesh state in northern India.
Under the agreement, Taqa will control the operations and management of both facilities. The remaining equity is held by Canadian institutional investors, which has 39 percent, and IDFC Alternatives’ India Infrastructure Fund II, which holds 10 per cent.
Over the past year, more Indian companies have been trying to raise cash by selling assets as slow economic growth has resulted to lower revenue and profits, while higher interest rates have made it expensive to borrow money.