I Squared Capital secures investment from Japanese consortium for India-focused NGPT

I Squared Capital, a globally recognized independent infrastructure investor, announced that a prominent consortium of Japanese investors has acquired a strategic minority stake in the Natural Gas Transition Platform (NGTP). Based in Singapore, NGTP operates a substantial network within India, focusing on city gas distribution, including the development and operation of Compressed Natural Gas (CNG) stations for vehicles, and the distribution of Piped Natural Gas (PNG) and Liquefied Natural Gas (LNG) to residential, industrial, and commercial customers.

The consortium includes major Japanese entities such as Osaka Gas, Japan’s second-largest city gas distributor, Sumitomo Corporation, a leading trading house, and the Japan Overseas Infrastructure Investment Corporation (JOIN), a government-backed entity promoting Japanese investment overseas. This collaboration is set to diversify NGTP’s shareholder base significantly and inject long-term capital into the burgeoning Indian natural gas market.

Harsh Agrawal, Senior Partner, APAC at I Squared Capital, expressed the strategic vision behind the partnership, stating: “India aims to boost the share of natural gas from nearly 7% currently to 15% of the primary energy mix by 2030. With the support of our new partners, we are committed to facilitating India’s shift from carbon-intensive fossil fuels to a more sustainable natural gas framework.” This initiative is in line with global decarbonization efforts, positioning natural gas as a transitional energy source to replace more polluting fuels such as diesel and coal.

The NGTP currently oversees a vast network that includes last-mile city gas distribution efforts managed by entities like THINK Gas and AG&P Pratham. These operations span 19 geographical areas, covering 325,000 square kilometers and serving an estimated 85 million people. The platform has developed significant infrastructure, including over 9,000 kilometers of low-pressure gas pipelines and hundreds of gas stations, which are pivotal in meeting the daily energy needs of millions of vehicles and numerous industrial users.

Further enhancing its sustainable energy credentials, NGTP is increasing investments in renewable natural gas (biogas), aiming to procure approximately 5 million tonnes over the next 25 years. This move supports the Indian government’s initiatives to boost biogas consumption, reduce agricultural waste pollution, and generate local employment. The platform is also exploring the potential integration of green hydrogen into its city gas networks.

The investment by the Japanese consortium aligns with the “India Japan Clean Energy Partnership” endorsed by Japanese Prime Minister Fumio Kishida and Indian Prime Minister Narendra Modi, underscoring a commitment to collaborative clean energy initiatives. This partnership is expected to introduce global best practices and advanced technology into India’s natural gas sector, significantly enhancing the operational and environmental standards.

This strategic partnership between I Squared Capital and the Japanese consortium represents a pivotal development in India’s energy sector. By leveraging international expertise and capital, India is well-positioned to enhance its natural gas infrastructure, which is crucial for the nation’s energy security and environmental sustainability.