MUMBAI: At a time when power companies are struggling to deliver investor returns, Macquarie Infrastructure and Real Assets (MIRA) Fund has invested Rs 780 crore in an unlisted company Ind Barath Energy Utkal -a subsidiary of Ind Barath Power Infra, a Hyderabad-based power generation firm -through a complex structured deal. The deal also helped 3i Infrastructure fund and PTC Financial Services to exit profitably.

Ind Barath Energy Utkal is currently developing a 700 MW thermal power project in Odisha, and has secured necessary clearances and regulatory approvals for the first phase of the 350 MW project which is currently under trial, while the next phase of the 350 MW power project is likely to be commissioned in the next three months. The company is also planning to add 660 MW capacity .

Confirming the deal, K Raghu Ramakrishnam Raju, chairman and managing director, Ind Barath Power Infra, said: "We are pleased to have a marquee investor like Macquarie on board with us. This gives us immense confidence in our ability to create value even in the toughest regulatory scenario."

MIRA manages over $100 billion in assets and is one of the world's largest infrastructure asset managers. The fund is invested for five years in the company, where downside return is limited, while upside is capped at a certain point, if returns are in excess of the agreement.

Ind Barath Energy Utkal's enterprise value is pegged at Rs 5,000 crore based on asset replacement value, which is fixed at about Rs 77.5 crore per MW. The company, as per the agreement, will sell 500 MW power out of the 700 MW to Tamil Nadu at Rs 4.91 per unit with a clause of passing higher fuel cost to customers, while the rest of the 200 MW will be available for merchant power business.

PTC Financial Services had made nearly three times the return on investment of Rs 105 crore made in 2011 in Ind Barath Energy Utkal; 3i Infrastructure fund had also invested. 200 crore during the same time.` Investec India, a subsidiary of Investec, a specialist bank and asset manager, was the sole financial advisor to the transaction.