P2 Solar has signed a memorandum of understanding (MOU) to purchase a 9.5MW small hydro power generation project, known as Project Barkote 1, located in northern India, for $21m.

Power generated from the project is transferred to state electricity company under a power purchase agreement (PPA).

P2 Solar CEO Raj-Mohinder Gurm said: "We have worked closely with our engineering, legal and financial advisors to assess Barkote 1 and with the MOU we have negotiated we believe this is a tremendous step forward for P2 in terms of building our project pipeline.

"This project is a great addition to our hydro development projects in India that we have previously announced, Rajgarh and Tibba. We are planning to initiate construction on these two projects soon. Barkote 1 came online in April 2014 and, has since then, been generating revenue and cash flow."

"We have signed an MOU with an investment fund to infuse the equity capital required for the balance of the purchase price, approximately $9.1 million. The fund is already undertaking due diligence on this project and all the parties are working together to complete the process quickly."