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Abu Dhabi, United Arab Emirates - A consortium led by TAQA, the international energy and water company from Abu Dhabi, has agreed to acquire two hydroelectric plants in India, making TAQA the largest private operator of hydroelectric plants in India.
The agreement follows the signing of the UAE-India Bilateral Investment Promotion and Protection Agreement in December 2013 and a commitment made by the UAE to invest USD 2 billion in India's infrastructure sector at the first UAE-India High Level Joint Task Force on Investments meeting held in Abu Dhabi in February 2013.
The consortium agreed to purchase the Baspa Stage II and Karcham Wangtoo plants in the northern state of Himachal Pradesh, from Jaiprakash Power Ventures Limited, a subsidiary of Indian infrastructure conglomerate Jaypee Group.
TAQA, which holds a 51% stake in the consortium, will have control of operations and management of both facilities under the proposed deal. The remaining equity will be held by one of Canada's largest institutional investors (39%) and IDFC Alternatives' India Infrastructure Fund II (10%).
The equity invested by the consortium in the acquisition of the two hydroelectric plants will amount to approximately INR 3,820 crores (USD 616 million[1]), of which 51% is from TAQA. The consortium will also acquire the assets' non-recourse project debt.Frank Perez, TAQA's Executive Officer and Head of Global Power & Water, said: "India's economic growth depends on having ample and reliable energy supply. TAQA is pleased to add these two high quality hydro power assets to our growing India business and to support India's economic growth."
The two plants have a combined power generation capacity of 1,391 megawatts (MW). Both plants are located in Kinnaur district within two kilometres of each other and share support facilities. They use run-of-the-river technology to convert natural water flow to electricity, eliminating the need for a reservoir. The plants are 35 kilometres from the Sorang hydroelectric plant, in which TAQA acquired a stake last year.
Following the completion of the transaction, TAQA's gross operational power generation capacity in India will total 1,741 MW, comprised of three hydroelectric facilities and one lignite power plant.