Piramal Enterprises Ltd. (PEL) and Canada Pension Plan Investment Board (CPPIB) have entered into a Memorandum of Understanding (MoU) to co-sponsor a renewable energy-focussed Infrastructure Investment Trust (InvIT) with an initial corpus of $600 million.

With the option to scale up further, the InvIT would seek to acquire up to 1.5-2GW of stable and cash-generating renewable assets on a hold-to-maturity basis. “We are pleased to partner with CPPIB on the launch of the first-ever InvIT in India, focussed on renewables,” Ajay Piramal, chairman, Piramal Group, said in a statement.

Both PEL and CPPIB will act as co-sponsors of the proposed InvIT and hold up to 75% of the units (with CPPIB committing $360 million and holding up to 60% and PEL committing $90 million and holding 15%) and seek to raise capital from other like-minded investors for the remaining 25%. “This is the first truly neutral ‘white-label’ InvIT – led by a fiduciary and supported by patient capital and strong corporate governance – that we believe, can serve as a strong catalyst for the sector as a whole,” Mr. Piramal said.