The Asian Infrastructure Investment Bank (AIIB) has recently injected INR 4.86 billion (approximately USD 58.4 million) into India’s largest renewable energy Infrastructure Investment Trust (InvIT). Known as Sustainable Energy Infra Trust (SEIT), the InvIT is backed by eight operational solar power generation assets with a total capacity of 1.54 gigawatts-peak, strategically positioned across India.
Co-sponsored by Mahindra Susten Private Limited, the dedicated renewable energy platform of the Mahindra Group, and Ontario Teachers’ Pension Plan, a prominent global institutional investor, SEIT has successfully garnered support from AIIB to fortify the development of InvITs as a prominent infrastructure asset class in the Indian market.
The investment not only marks AIIB’s second venture into InvITs in India but also underscores the bank’s commitment to fostering innovative infrastructure financing solutions. The project follows AIIB’s initial investment in Oriental Structural Engineers InvIT in June 2019, focusing on mobilizing long-term private institutional capital for road and highway financing in India.
By backing the formation of SEIT, AIIB aims to provide a valuable avenue for sponsors to monetize their investments in revenue-generating infrastructure assets. This infusion of capital will facilitate the realization of ambitious growth plans, enabling the development of new renewable energy assets. The success of SEIT’s listing is seen as a pivotal step in establishing and validating InvITs as a long-term financing channel in India.
AIIB Director General (Banking Department, Region 1), Dongik Lee, commented on the significance of the investment, stating, “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.”
The increased demand for power in emerging markets underscores the need for broader private sector participation in financing renewable energy growth. AIIB’s strategic partnerships within the ecosystem aim to catalyze the expansion of the infrastructure asset class, providing essential support for achieving Net Zero goals.
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