A new entity called Cube Grid is being launched for this purpose, said Harsh Agrawal, senior partner at the $55 billion asset manager. The name resembles an investment platform for road assets called Cube Highways that I Squared Capital has established in India.
“I Squared has been an investor in India for over a decade and has seen first-hand the rapid expansion of power generation, particularly renewables,” Agrawal told ET via video conferencing from Singapore. “We believe this creates a multi-decade opportunity to acquire and build critical grid assets that enable economic growth, enhance energy security, and accelerate the energy transition.”
Agrawal spoke about the Indian government’s roadmap to modernise and expand the national grid, requiring an estimated $120 billion of capital expenditure over the next five to seven years to integrate new generation capacity and meet rising demand.
He said this can potentially generate a significant pipeline of transmission projects across the country.
Cube Grid will build transmission infrastructure in partnership with Dineshchandra Group, an existing project development partner of Cube Highways. It has signed definitive agreements for seed assets totalling more than 1,450 circuit kms of transmission lines.
“We are attracted to the underlying concession framework which can be 35-year concessions for transmission projects,” he said. “This provides stable cash flows over long durations, and we can be long-term holders of these assets.”Concessions for power transmission projects are granted by state-owned Power Grid Corporation of India Ltd.
I Squared Capital has invested $4 billion in India so far across a range of portfolio companies, said Agrawal. Its portfolio company Cube Highways has built 8,000 lane kms of highways in the country. Cube Highways has investors such as Abu Dhabi Investment Authority, Mubadala, and British Columbia Investment Management.