UPDATE 1-Blackstone to invest $300 mln in Moser Baer Projects

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NEW DELHI Aug 18 (Reuters) - U.S. private equity firm Blackstone Group (BX.N) has agreed to invest $300 million, or 13.50 billion rupees, in unlisted energy firm Moser Baer Projects Pvt Ltd, the two companies said on Wednesday. Blackstone will pick up a "significant minority stake" in Moser Baer Projects, Blackstone India chief Akhil Gupta told a news conference.

"We are actively in dialogue with other power players (for picking up stake)," Gupta said, adding the private equity firm had an "appetite" to invest up to $1 billion in India's power sector in the next 3-5 years.

Blackstone expects to invest $2-3 billion in India in the next five years, mainly in infrastructure, Gupta said. It has invested $1.25 billion in 12 deals in the past five years in India, of which $360 million went into the power sector, he said.

"Whenever you have scacity, the return on your investment will be good," he added, referring to the power scarcity in India.

Last month, Blackstone had agreed to invest $59 million for a 12.5 percent stake in power producer Monnet Power Company Ltd, a wholly owned unit of India's Monnet Ispat & Energy (MNET.BO). [ID:nSGE62P04X].

Moser Baer Projects is founded by Deepak Puri, who controls listed compact disc maker Moser Baer India (MOSR.BO).

Moser Baer Projects needs to spend 300 billion rupees to build 5000 mw power plants, comprising 4000 mw of thermal, 500 mw of hydel and 500 mw of solar, by 2016, chief financial officer Sushil Bhagat said.

While three-fourths of the funding requirement will be met through debt, the remainder will be contributed by founders and private equity. The company has already raised about 20 billion rupees in equity, including the funds from Blackstone.

Moser Baer Projects has so far raised 47 billion rupees in debt and achieved financial closure for power projects worth 1220 mw so far, Bhagat said.

Moser Baer projects will look at raising funds through an initial public offering only in 2013-14 after a few projects have come onstream, Bhagat said, adding fresh private equity for current projects will now be raised at specific project level and not at the parent company level. (Reporting by Sanjeev Choudhary; Editing by Sunil Nair)