Emerging markets asset manager Ashmore has launched the Ashmore PTC India Energy Infrastructure Fund, a joint venture with PTC India Limited, one of India’s leading energy sector institutions.
The fund will provide equity financing to power projects across all energy related sectors in India, including generation, transmission, distribution, fuel extraction and fuel transport infrastructure. As a way of meeting the widening demand supply gap in India, the fund will target the private sector to lead the initial investments and exit through strategic sales and public markets once assets mature. In order to secure various exit channels the portfolio will contain an optimum mix of holding and asset companies.
The closed-ended fund will offer a target return of 20%, with 10 years maturity, and is aimed at local and international investors. Capital from international investors will be channelled into the local fund through a registered feeder fund. Target fund size is USD 750 million.
“We believe the Indian energy market, characterised by a lack of capital, rising demand and a strong and non-discriminatory regulatory framework, presents a compelling investment opportunity," says Jerome Booth, Head of Research at Ashmore. "At the same time, we expect India to become the third largest electricity market globally by 2030. There is also a huge opportunity for private sector participation to bridge the significant deficits which currently exist in the market.
"To realise this potential, we are pleased to have formed a joint venture with India’s largest power traders and one of India’s leading energy finance institutions. With PTC’s sound sectoral knowledge and strong leverage with developers, coupled with our expertise in investing in the emerging market’s energy sector, deep insights into the framework for evaluating such investments and track record in innovative exits and high governance standards, we believe we are ideally placed to deliver superior returns to our investors."
