About

Can you briefly explain how the legal team is structured, highlighting key individuals and their role within the department?

CLP India’s business saw significant changes and growth in 2018. In parallel, the energy sector continued to face several challenges, ranging from low tariffs, regulatory uncertainty for reasons such as the introduction of GST, several EPC contractors facing liquidity crisis, increasing consolidation in the market to introduction of disruptive technologies. As CLP India looks to grow in such uncertain times and explore previously unchartered territories of innovation business, the legal team has become a strategic partner as opposed to a support function. To be better equipped to meet these challenges, in the previous year, the legal team has been expanded to add lawyers with skill sets in specific areas with the aim that the product delivered by the legal team to its clients is complete and comprehensive.

What are the most significant transactions that your legal team has been involved with in the last two years?

The legal team is an integral part of CLP India and is involved in all aspects of the business from assisting in formulating the business strategy to contracting and managing disputes. Recent significant transactions for the CLP India legal team are: First, CLP India entering into agreements with Kalpataru Power Transmission (KPTL) to acquire three transmission assets. CLP India has entered into binding agreements with KPTL and Techno Electric & Engineering (Techno) to purchase equity stakes in three special purpose vehicles (SPVs) owning power transmission assets for an estimated enterprise value of INR 32bn. Completion of the transaction is subject to requisite approvals and compliances. The transaction marks CLP India’s entry into the power transmission sector. With this step, CLP India has broadened its portfolio to straddle two out of the three main segments in India’s power value chain. Rajiv Mishra, managing director, CLP India, said, ‘India is a primary growth market for CLP and Caisse de dépôt et placement du Québec’s (CDPQ), and the two companies share a vision to invest in a low-carbon, clean energy portfolio in India. Entering the transmission sector is a landmark for CLP India. The acquisition of the KPTL assets will enable us to expand our geographical reach across the country and reinforce our commitment to grow our investments’. It was a complex transaction with several aspects which needed to be addressed and accounted for. For instance, in India, transmission is a regulated sector, hence, the parties had to ensure that the transaction structure and documentation were in compliance with the requisite regulations, licenses and the transmission agreement. Similarly, since the transaction was between a resident and non-resident entity, foreign exchange laws also became relevant and parties had to ensure that they were compliant with the same. Second, CDPQ’s investment in CLP India. CLP GPEC (Mauritius) Holdings’ (CLP GPEC, a wholly-owned subsidiary of the CLP Group) sold a 40% stake in CLP India and entered into a strategic partnership with CDPQ. This transaction is one of the largest strategic investments in the Indian power sector. The definitive documents were signed on 13 September 2018 and the share transfer was completed on 28 December 2018. To date CLP GPEC owns 60% shareholding in CLP India and CDPQ owns the balance 40% shareholding in CLP India. The definitive documents had to be carefully tailored to accommodate each parties’ commercial considerations and interests. As the deal has been concluded between two non-resident entities but relates to shares in an Indian company engaged in the business of developing and managing several power projects in India, it required close co-ordination between the Indian and global teams and their advisors. The CLP India in-house legal team, led by general counsel Sudipta Ghosh, advised on the Indian law requirements and also ensured that the definitive documentation was structured such that interests of both shareholders would be accounted for while meeting the high standards of the CLP and CDPQ groups. Third, CLP acquired a 49% stake in two solar power projects from Suzlon Energy. CLP India and Suzlon Energy entered into definitive agreements pursuant to which CLP India, acting through its subsidiaries, acquired 100% equity stake in two operational solar power projects (with an aggregate capacity of 70MW) owned and operated by Suzlon in Dhule District, State of Maharashtra, for an approximate value of ~ INR 766m. Renewable energy is a key pillar in CLP’s growth journey and this investment re-enforces CLP’s commitment to grow in a sustainable manner. CLP India’s in-house legal team, led by Ghosh, advised on the acquisition. The in-house team drafted the transaction documents in consultation with Phoenix Legal and led the document negotiations with the counterparty. Fourth, managing regulatory practice. The electricity sector being a highly regulated sector, CLP India is often grappling with complex legal and regulatory issues. Ghosh along with the CLP India in-house legal team manages the regulatory practice for the organisation. Some of the important components of CLP’s regulatory practice includes representing the company in regulatory proceedings before the regulatory authorities on diverse matters including issues of tariff determination, interpretation and implementations of various regulation, disputes arising out of contractual arrangements with State DISCOMS and various other adjudicatory proceedings.

Have any political, economic or regulatory changes in India impacted CLP India and the team recently?

The Indian power sector is going through a challenging phase. Some of this is natural as the sector makes the transition from hydrocarbons to renewable sources of energy. Additionally, the industry has had a few challenges such as a shortage in coal supply, payment dues from distribution companies and a changing regulatory environment. The continued lack of easy access to fuel for our coal-based power plant coupled with no visibility on new coal linkages, poor financial condition of state distribution companies despite certain improvements on account of the UDAY scheme are some of the issues which have impacted the company and accordingly the legal team has been actively involved in pursuing these matters.

What will be the main focus for the company in the next 12 months and how does the team intend to assist with this?

CLP India has plans to double its capacity over the next 3-5 years and invest in setting up between 700MW and 1,000MW of capacity every year. The legal team is and will be a strategic partner in the growth process. The growth will come from greenfield as well as the M&A space. Over the last year, the legal team has added capacity and expertise in these areas so as to ensure that the business teams get accurate, effective, practical and timely advice.