Adani Transmission Limited (ATL), the country’s largest private sector power transmission company, has been consolidating its presence in the sector through both the organic and inorganic routes. During financial year 2020-21, ATL acquired two interstate transmission projects, besides winning two intra-state transmission projects through the tariff-based competitive bidding (TBCB) route. ATL’s recent acquisition of Warora-Kurnool Transmission Limited (WKTL) has reinforced its pan-India presence, further strengthening its position. Power Line takes a look at the assets acquired by ATL in recent deals…
WKTL’s acquisition
Recently, in March 2021, ATL signed an agreement with Essel Infraprojects Limited (EIL) for the acquisition of WKTL for an enterprise valuation of Rs 33.7 billion. WKTL will develop, operate and maintain a transmission system of around 1,750 ckt. km, which will run across Maharashtra, Telangana and Andhra Pradesh. The project comprises two significant 765 kV interstate transmission lines linking Warora to Warangal and Chilakaluripeta to Kurnool via Hyderabad, with a new 765/400 kV substation at Warangal, which will be built and operated as a part of the agreement. The project was awarded through the TBCB process on a build-own-operate-maintain (BOOM) basis. It has a concession period of 35 years. The Central Electricity Regulatory Commission has provided regulatory approval, while lenders’ consent will be obtained before the closure of the deal. The acquisition is expected to be completed in one month subject to all necessary regulatory approvals and other consents. With this acquisition, the cumulative network of ATL will reach about 17,200 ckt. km, of which around 12,350 ckt. km is already operational and 4,850 ckt. km (including WKTL) is at various stages of development.
Portfolio growth
In March 2021, ATL won an intra-state power transmission project in Madhya Pradesh for Rs 13 billion under the TBCB route. The bidding was conducted by REC Transmission Projects Company Limited (RECTPCL). The project’s special purpose vehicle (SPV), MP Power Transmission Package I Limited, incorporated in August 2020, will be transferred to ATL in due course. The project aims to strengthen the power transmission infrastructure in Madhya Pradesh in order to cater to an increased power demand of around 18,000 MW by 2021-22 and further to 21,000 MW by 2026-27, from 14,555 MW in 2019-20. ATL will set up 16 new substations and strengthen the system in the existing power supply network. RECTPCL offered two packages for the development of the intra-state transmission network in Madhya Pradesh through TBCB. Adani quoted the winning bid for the first package. The other bidders for the project were Sterlite Power, Dilip Buildcon, Power Grid Corporation of India Limited and Torrent Power. The same bidders are in the fray for the second package, for which the results are yet to be declared.
The other intra-state transmission project acquired by ATL during the year was Kharghar Vikhroli Transmission Private Limited (KVTPL), incorporated by Maharashtra State Electricity Transmission Company Limited. ATL completed the acquisition of the SPV in June 2020, although it had won this project through TBCB and received the letter of intent in December 2019. ATL will build, own, operate and maintain (BOOM) the transmission project in Maharashtra for a period of 35 years. The project entails setting up of 34 km of 400 kV and 220 kV transmission lines, along with a 1,500 MVA 400 kV gas-insulated switchgear (GIS) substation at Vikhroli in Mumbai. This would mark the first ever 400 kV substation facility in the city. The project is scheduled for completion in 2023. Recently, in March 2021, ATL received state government clearance for the construction of the 400 kV Vikhroli receiving station and associated incoming transmission lines.
As part of its inorganic growth, in November 2020, ATL completed the acquisition of 49 per cent stake in Alipurduar Transmission Limited from Kalpataru Power Transmission Limited for an enterprise value of Rs 12.86 billion. The share acquisition is pursuant to definitive agreements signed in July 2020. The balance 51 per cent stake will be acquired after obtaining requisite regulatory and other approvals consistent with the transmission service agreement. Alipurduar Transmission operates transmission lines aggregating around 650 ckt. km in West Bengal and Bihar. The project was awarded through the TBCB process on a BOOM basis.
The road ahead
WKTL, with its strategic west to south 765 kV interconnector and substation in southern India, marks ATL’s presence in all regions of the country. The asset will not only increase ATL’s size and scale, but also take ATL closer to its target of setting up 20,000 ckt. km of transmission lines by 2022. The acquisition highlights ATL’s drive towards differentiated capability through inorganic growth. Its successful integration will make such assets, value accretive for its stakeholders in the long term.
Going forward, the enhanced scale of operations will generate significant benefits for ATL in terms of cost optimisation and shared resources.
Nikita Gupta