Finance Facility

ATL raises $700 million to fund its transmission portfolio

In one of Asia’s largest revolving project financing deals, Adani Transmission Limited (ATL) has recently raised $700 million for financing its under-construction transmission portfolio. This will fully finance the company’s under-con­s­tru­c­tion transmission projects in Gujarat and Maharashtra to establish a green energy corridor and strengthen the overall grid. The revolving senior debt facility is the first of its kind sanctioned by international banks in the transmission sector and is set to play a key role in the development model of the Adani Group.

Details of the financing deal

ATL has raised $700 million for its under-construction transmission asset portfolio through definitive agreements signed with leading international banks. With this senior debt facility, ATL will finance its under-construction transmission network portfolio in Gujarat and Mahara­shtra. The projects located in Gujarat are a part of the green energy corridor that has been developed to facilitate the tra­nsmission of renewable energy. The pr­o­jects being implemented in Mahar­ashtra are key upgrades to strengthen the transmission system and critical response drivers for overcoming the technical cons­tra­ints to ensure overall grid stability and the integration of green energy to promote the move to a low-carbon economy.

The company has entered into definitive agreements with eight leading international banks. Standard Chartered Bank ac­ted as the mandated lead arranger and bookrunner (MLAB), and the documentation and account bank. MUFG Bank ac­ted as the MLAB and technical adviser for the facility while DBS Bank, Intesa San­paolo S.p.A., Mizuho Bank, Societe Gene­rale, Siemens Bank GmbH, and Su­mito­mo Mitsui Banking Corpora­tion each ac­ted as MLABs for the facility. The unique capex revolving structure of the facility will provide funding of $1.1 billion on a fully drawn basis. The definitive agreements set out a “Platform Infrastru­cture Financing Framework” of agreed principles and procedures. Under this, the company will be engaging with fi­nan­ciers for all future projects, as per the agreed threshold parameters. Overall, the revolving facility is a crucial part of ATL’s overall capital management plan, paving the way for the company to fully fund its growth aspirations. The transaction will also help meet the capital recycling re­quirements of the banks, making the same capital available for ATL’s current and future projects. It will deepen the overall liquidity pool by means of an international banking market, in addition to the existing domestic as well as global public and private debt capital market issuances. The revolving nature of the facility has the potential to enable the company to achieve its target of constructing 20,000 ckt. km of transmission lines by 2022.

In an official release Anil Sardana, managing director and chief executive officer, ATL, remarked, “This project financing deal is the first of its kind sanctioned by in­ternational banks in the transmission sector, and validates the overall development model of the Adani Group. All the Adani group companies have aligned the­ir investment plans to honour the na­tion’s commitment on climate change. ATL is at the forefront of grid stability, and providing sustainable, reliable and affor­dable energy solutions.

Conclusion

ATL, the country’s largest private transmission company, has a cumulative network of around 18,800 ckt. km, of which around 13,200 ckt. km is operational and around 5,600 ckt. km is at various stages of construction. The company has been co­nsolidating its presence in the sector through both the organic and inorganic route. Overall, the company is committed to decarbonising the production, transmission and distribution of power to tackle climate change as well as provide access to affordable and clean energy. The recent financing facility is a step towards overall energy transition, with the power transmission projects being developed in Gujarat and Maharashtra aiming to strengthen the evacuation infrastructure for renewable energy. This finance facility will play a pivotal role in assisting the company in its goal of achieving 20,000 ckt. km of transmission line length by 2022, and thereby contributing towards achieving Power for All by 2022.

Bhakti Dogra

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