CPPIB invests in Indian roads, Korean tower, buys Enbridge renewable power stake

The Canada Pension Plan Investment Board is among the anchor investors in India’s first private infrastructure investment trust.

Sponsored by L&T Infrastructure Development Projects Ltd., the CPPIB and Allianz Capital Partners will take a combined 55 per cent stake in the IndInfravit trust. The trust will focus on developing toll roads and other road infrastructure. It will initially acquire five operational toll roads spread across four Indian states.

The CPPIB is taking a $200-million stake, amounting to 30 per cent of the trust’s units, in addition to taking a board position.

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“This investment allows CPPIB to deepen our relationships with Allianz Capital Partners and L&T IDPL, and demonstrates our commitment to investing in India. The rapidly growing Indian economy brings with it a need for sound infrastructure, and we are pleased to be able to support this growth, while delivering solid long-term risk adjusted returns for the CPP fund,” said Scott Lawrence, managing director and global head of infrastructure at the CPPIB, in a press release.

In another investment move, the CPPIB is spending $1.8 billion to enter into a joint venture and acquire 49 per cent of a selection of Enbridge Inc.’s  North American onshore renewable power assets. It’s also acquiring a 49 per cent interest in two German offshore wind projects.

“The monetization of $1.75 billion of renewable assets through our newly formed joint venture with CPPIB is an important step in achieving the objective we set when we rolled out our three-year plan and strategic priorities in December,” said Al Monaco, president and chief executive officer of Enbridge, in a press release.

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“This deal makes a significant contribution to our $3-billion asset sales target for the year and will also eliminate $500 million of equity capital requirement that we had previously included in our funding plan. This transaction, in addition to our other funding actions taken since April, accelerates funding for our secured capital program and gives us increased financial flexibility.”

The assets in the joint venture include all of Enbridge’s Canadian renewable assets, as well as two U.S. entities, the Cedar Point wind farm in Colorado and the Silver State North solar project in Nevada.

In addition, the CPPIB and Enbridge have agreed to work together on forming a 50/50 joint venture involving European offshore wind projects in the future.

“We are also very pleased to be partnering with CPPIB in future development of our European offshore wind business, which we believe will have great opportunities for years to come,” said Monaco. “The combination of our operating and development capability with CPPIB’s resources and experience creates a powerful Canadian champion for developing offshore renewable energy projects in Europe.”

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And finally, the CPPIB announced a joint venture to acquire to acquire a Grade A office building, the Kumho Asiana main tower in Seoul, for about $500 million. “The opportunity to invest in one of the largest office markets in Asia through this prime office building fits well with CPPIB’s strategy to invest in top-tier, well-located real estate,” said Jimmy Phua, managing director and head of real estate for Asia at the CPPIB.