NEW DELHI : Canadian pension fund Ontario Municipal Employees’ Retirement System (OMERS) is planning to expand its presence in India’s clean energy space, including wind, solar and hydrogen, said OMERS executive vice-president and global head of infrastructure Annesley Wallace and the managing director for infrastructure Delphine Voeltzel in an interview.
The fund recently picked up a 19.4% stake in NYSE-listed Azure Power Global Ltd. It is also looking to invest in transmission projects, and water and sewage treatment plants.
“We think we can grow that (Azure) platform, and deploy more capital,” Voeltzel said. “There are discussions around transmission lines and distribution lines, and early-stage discussions on green hydrogen. There are also other areas in energy transition that could be potentially interesting for us,” she added.
Delphine, who is a nominee director of OMERS on Azure’s board, said the fund will give preference to companies that are part of its green energy portfolio, but in case of renewable energy segments, where Azure is not present, it may also look at other companies.
“We have a preference as much as possible to deploy capital in our portfolio companies because we already know them and are comfortable with the management. If we think it makes sense for Azure to foray into green hydrogen, that’s an area that we will consider.”
“(However), if it’s a decision for Azure not to go into that area then we are not averse to go into that space with a different company,” she added.
The company may also look at investing in water and waste management in the short to medium term, she said.
OMERS’ portfolio has assets worth $95 billion under management as of 31 December 2021. The Asia Pacific region, including India and Australia, is a major market for the fund, comprising 10% of its asset distribution.
Canadian pension funds are betting big on the Indian clean energy space with so-called ‘patient capital’ seeking modest yields over time. India fits the risk profile given that the market has matured, and there is increasing focus on environmental, social and governance (ESG) investing.
The government’s commitment to make India carbon-neutral by 2070 has increased business activity in the renewable space, leading to investor traction. India is running the world’s largest programme to achieve 175GW of renewable energy capacity by 2022.
According to Wallace, in terms of infrastructure, OMERS has identified five themes to invest in, such as energy transition, mobility, connections (digital infrastructure), community services (laboratories) and natural systems (water, waste management) and the company wants to be “well diversified” and will look for “different exposures” across India.
In India, OMERS is looking to invest in four out of the five sectors—energy transition, mobility, digital infrastructure and natural systems. The fund will look at opportunities in fibre, tower infrastructure and data centres for digital infrastructure or the ‘connections’ space and mobility, besides electric vehicles, railways, airports and ports.
In February 2019, it picked up a 22.4% stake in IndInfravit Trust, which has 13 toll concession projects in its portfolio. In mobility, OMERS bought a stake in Bangalore International Airport in September 2021 via Anchorage Infrastructure Investments Holdings Ltd. OMERS Administration Corp. is one of the few pension funds that was granted income tax exemption by the government to invest in infrastructure projects.
Source: livemint.com
