Global private equity firm I Squared Capital on Monday said a consortium of Japanese investors will invest $370 million for a minority stake in Singapore-based Natural Gas Transition Platform, which has investments in Indian city gas distribution networks.
The consortium comprises Osaka Gas, the second-largest city gas distributor in Japan; Sumitomo Corp, one of Japan’s largest trading houses; and the Japan Overseas Infrastructure Investment Corporation (JOIN), a government-sponsored entity that promotes Japanese investment abroad.
Natural Gas Transition Platform invests in companies that develop and operate Compressed Natural Gas (CNG) stations for vehicles, pipe natural gas to homes, and distribute Piped Natural Gas (PNG) as well as Liquefied Natural Gas (LNG) to industrial and commercial customers in India.
The funding is expected to diversify the platform’s shareholder base and bring in additional long-term capital, I Squared said in a statement.
“India aims to boost the share of natural gas from nearly 7% currently to 15% of the primary energy mix by 2030,” Harsh Agrawal, Senior Partner, APAC, I Squared, said, adding that the additional capital provided will be used to support the energy transition in India through the expansion of last-mile city gas distribution infrastructure.
Natural Gas Transition Platform has active investments in last-mile city gas distribution businesses in India, including THINK Gas and AG&P Pratham, in which I Squared also has stakes.
Through the use of new infrastructure developed over the last four years, including over 9,000 kilometres of low-pressure gas pipelines, 30 LCNG (Liquefied Compressed Natural Gas) and compressed gas stations and over 430 CNG stations, the platform will serve millions of vehicles per day and thousands of commercial and industrial users by 2030.
In addition to gas distribution, the platform will increase investments to boost the consumption of renewable natural gas (biogas) in India. It claims to be one of the largest procurers of biogas in India and aims to procure about 5 million tonnes over the next 25 years.
With over $36 billion in assets under management focusing on utilities, digital infrastructure, energy, transport, environmental infrastructure, and social infrastructure in North America, Europe, Latin America, and Asia, I Squared Capital has investments in Indian companies including Polaris Smart Metering, Cube Highways and Think Gas.
India’s renewables sector has been attracting increasing foreign investment and is among its top five industries for overseas funds, with a 5% share of all inflows in April-September 2022, compared with 3.3% in the same period a year ago, according to Reuters.