AIIB Anchor Investor in India’s Largest Renewable Energy Infrastructure Investment Trust

The Asian Infrastructure Investment Bank (AIIB) has invested INR4.86 billion (around US$58.4 million) in India’s largest renewable energy Infrastructure Investment Trust (InvIT).

The InvIT (Sustainable Energy Infra Trust or SEIT), has eight operating solar power generation assets of 1.54 gigawatt-peak total capacity located nationwide in India. SEIT is co-sponsored by Mahindra Susten Private Limited, the dedicated renewable energy platform of one of the largest Indian multinational conglomerates (the Mahindra Group) and Ontario Teachers’ Pension Plan, a leading global institutional investor.

AIIB aims to support the development of InvITs as an infrastructure asset class in India. The successful listing of SEIT contributes to the capital-raising track record and is a testament to establishing and validating InvITs as a long-term financing channel in India.

By supporting the formation of SEIT, the sponsors will have a channel to monetize investments in revenue-generating infrastructure assets, freeing up the much-needed capital to undertake their ambitious growth plan to develop new renewable energy assets.

Support from multilateral development banks like AIIB will strengthen investors’ awareness of the asset class and comfort level. This is necessary for channeling broader sources of institutional capital and domestic retail savings to the infrastructure industry and scaling up such monetization tools.

“This demonstrates AIIB’s continued support for innovative infrastructure financing solutions, promoting green infrastructure and mobilizing private capital to deepen the breadth of financing availability to our Member’s infrastructure sector and to support their commitment in achieving Net Zero targets,” said AIIB Director General (Banking Department, Region 1) Dongik Lee.

“The increasing power demand in emerging markets calls for broader private sector participation to finance growth renewable energy. AIIB continues to embark on strategic partnerships in the ecosystem to catalyze the growth of the infrastructure asset class.”

The project is AIIB’s second investment in InvITs in India, following a June 2019 investment of approximately USD50 million in Oriental Structural Engineers InvIT, the objective of which is to mobilize long-term private institutional capital for financing of roads and highways in India.