Canadian fund Ontario Teachers’ Pension Plan Board is picking up a 30 per cent stake in Mahindra Susten Private Limited, the renewable energy player for Rs 2,371 crore ($300 million).

The deal envisages the setting up of an infrastructure investment trust (InvIT), which will initially comprise the renewable power assets of Mahindra Susten with capacity of around 1.54 GWP (global warming potential).

A statement from the Mahindra group said a sum of Rs 575 crore ($73 million) of the proceeds from the sale will be used to repay the loans taken by Susten from the group.

The statement said the strategic partnership will capitalise on the growing renewables opportunity in the country and contribute towards the country’s ambitious decarbonisation plans.

The Mahindra group will receive an inflow of around Rs 1,300 crore ($165 million) from the deal.

The Mahindras and Ontario Teachers will jointly explore the sale of an additional 9.99 per cent stake in Susten by May 31, 2023.

The group will deploy these funds and an incremental amount of up to Rs 1,750 crore ($220 million) into the business and in InvIT over the next seven years.

Over the same period, Ontario Teachers has also committed itself to invest an additional amount of up to Rs 3,550 crore ($450 million) into the business and the InvIT.

The transaction will enable Mahindra Susten to build a strong renewable energy business focused on solar energy, hybrid energy, integrated energy storage and round-theclock green energy plants.

The partnership comes at a time several companies have been focussing on renewable energy. Both Gautam Adani with investment plans of $20 billion and Mukesh Ambani with plans to invest at least Rs 75,000 crore have announced massive projects.

The Tatas are also investing aggressively into the space with reports saying that it plans to deploy at least Rs 75,000 crore.

Last month, Tata Power Renewable Energy raised Rs 2,000 crore by issuing 8.36 crore shares to Blackrock-backed GreenForest New Energies Bidco.

The partnership syncs with Susten’s plan to grow its green energy portfolio, Deepak Thakur, MD and CEO of Mahindra Susten said.

GREEN DRIVE

■ Ontario Teachers Pension Plan board to pick up 30% in Mahindra Susten

■ Mahindra Susten will set up InvIT

■ Mahindra Susten to repay Mahindra group loan

■ Plan to sell another 9.9% by May 2023