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Piramal Enterprises, Canadian Pension Plan set up new trust

Piramal Enterprises has tied up with Canada Pension Plan Investment Board, a Canadian pension fund, to co-sponsor a renewable energy focused Infrastructure Investment Trust (InvIT).  With an initial corpus of US$ 600 million, and the option to scale further, the InvIT would seek to acquire up to 1.5-2GW of stable and cash generating renewables assets on a hold-to-maturity basis, with a firm focus on diversification of both asset type as well as off-taker profile. Both Piramal Enterprises and Canada Pension Plan Investment Board will act as co-sponsors of the proposed InvIT and hold up to 75% of the units (with CPPIB committing $360 million and holding up to 60%; PEL committing $ 90 million and holding 15%) and seek to raise capital from other like-minded investors for the remaining 25%. PEL would act as the sole investment manager as well as project manager for the proposed InvIT. Ajay Piramal, chairman, Piramal Group, said he renewable energy sector is at an inflection point and is witnessing significant consolidation, the pace of which is likely to increase in the near future. He added that this is the first truly neutral ‘white-label’ InvIT – led by a fiduciary and supported by patient capital and strong corporate governance – that we believe, can serve as a strong catalyst for the sector as a whole.

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