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
The Sustainable Energy Infra Trust (SEIT), India's largest renewable energy Infrastructure Investment Trust, has received INR 4.86 billion (equivalent to USD 58.4 million) investment from the Asian Infrastructure Investment Bank (AIIB).
SEIT is co-sponsored by Mahindra Susten Private Limited, the dedicated renewable energy platform of one of the largest Indian multinational conglomerates. SEIT comprises eight operating solar power generation assets with a total capacity of 1.54 gigawatt-peak across India.
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 monetise investments in revenue-generating infrastructure assets, freeing up 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 channelling broader sources of institutional capital and domestic retail savings to the infrastructure industry and scaling up such monetisation tools.
"This demonstrates AIIB's continued support for innovative infrastructure financing solutions, promoting green infrastructure, and mobilising private capital to deepen the breadth of financing availability to our Member's infrastructure sectors and to support their commitment to 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 in renewable energy. AIIB continues to embark on strategic partnerships in the ecosystem to catalyse 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 is to mobilise long-term private institutional capital to finance roads and highways in India.