CDPQ eyes opportunities in sustainable mobility, telecom

The pension fund may set up platforms to tap opportunities in these sectors if it finds the right investments. CDPQ operates three platforms in India—Azure and Aprava on the energy side and Maple Highways on the roads.

“We are interested in the whole theme around sustainable mobility, including electric vehicles, and we are evaluating that space. Another area of interest where we could build a platform is telecom—towers, fibres,” said Saurabh Agarwal, managing director of CDPQ India and managing director of infrastructure, South Asia and the Middle East.

Opportunistically, the pension fund manager is also looking at airports, he added.

While it explores investments in these new areas, the Canadian pension fund continues to grow its existing platforms in energy and roads, where it sees a massive opportunity for long-term investments.

Last week, CDPQ closed the acquisition of the second road asset under its Maple Highways platform, taking the enterprise value of the platform to ₹8,000 crore, making it one of the biggest road platforms in the country. Maple Highways acquired the 135 km long Eastern Peripheral Expressway that encircles the National Capital Region for an enterprise value of ₹6,267 crore from the National Highways Authority of India in the largest road transaction to occur as part of the Indian government’s asset monetization programme this year.

“Road transportation is the most frequently used mode of transportation in India; it is a sector that has been attracting private capital since the early 2000s, resulting in one of the most evolved and well-structured concession and policy regimes in the country’s infrastructure sector. We believe that there is long-term sustainable opportunity in building a roads and highways platform in India,” Agarwal said.

He added that the pension fund’s vision for the platform is to create a derisked business that can last decades, creating stakeholder value. “With access to patient capital, the platform will invest in road assets across the risk/reward spectrum with a focus on long-term value creation, leveraging CDPQ’s extensive experience in bringing global best practices, especially on ESG and technology fronts,” he said.

The platform, currently, is only looking to acquire operating road assets, but Agarwal said that CDPQ might also look at greenfield highway construction in future.

“We are not opposed to greenfield opportunities, but right now, we are only looking at the operating side, as there are plenty of opportunities in the market for Maple,” he said.

India remains a geography of major interest for the Canadian pension fund manager for infrastructure investment given the depth of the market, and thus, the pension fund sees more growth in its investments in India.

“When we embarked on an APAC strategy in 2016, India was one of the first areas of focus; it is the biggest market in the region in terms of depth, diversity and annual deal flow,” said Cyril Cabanes, managing director, infrastructure, Asia Pacific at CDPQ.

“If you look around the region, they (NHAI) have had a monetization programme now for almost five years with 10 formal processes run and resulting in the sale of four bundles raising in excess of ₹18,000 crore. No other country in Asia has done that,” he added.