Financial Briefs: India and overseas

• Powergrid approves investments of over Rs 40 billion (India)

Power Grid Corporation of India Limited (Powergrid) has given approval for investments of Rs 40.71 billion for two projects. It has approved Rs 5.24 billion for the Ea­stern Region Expansion Scheme XXIX, and Rs 35.47 billion for the Transmission System for Kurnool Wind Energy Zone/ Solar Energy Zone–Part A and B. The former is scheduled to be commissioned by November 2025 and the latter by Nov­ember 2024.

• Powergrid to raise Rs 9 billion via unsecured, non-convertible bonds

Powergrid has given its approval for raising Rs 9 billion via unsecured, non-convertible, non-cumulative, redeemable, taxable bonds. The bonds will be issued on a private placement basis through the securitisation of cashflows of 10 years (till 2032-33) of its operational special purpose vehicle, Powergrid Mithil­an­chal Tra­ns­mission Limited. The base issue size is Rs 3 billion, with a greenshoe option of Rs 6 billion, taking the total issue size to Rs 9 billion. The bonds are redeemable at par in 40 equal installments with interest pay­ments on a quarterly basis. It will be lis­ted on the NSE and/or BSE Limited.

• PFC signs agreement with Japan’s JBIC for loan of Rs 1.65 billion

Power Finance Corporation Limited (PFC) has signed an agreeme­nt with the Japan Bank for Interna­tional Coopera­tion (JBIC) for a project loan of JPY 2.65 billion (Rs 1.65 billion). Under this facility, JBIC has proposed to fin­ance some of PFC’s projects that ensure effective re­duction of greenhouse gas emissions and conservation of the environment. The deal was executed under a general ag­reement signed between PFC and JBIC for JPY 30 billion.

• IndiGrid completes acquisition of Khar­gone Transmission from Sterlite Power

India Grid Trust (IndiGrid) has completed the acquisition of 100 per cent shareholding and economic interest in Khar­gone Transmission Limited (KTL) from Sterlite Power Transmission Limi­ted (SPTL). In­di­Grid and SPTL signed the binding share purchase agreement for the acquisition on January 21, 2023. In­diGrid received its unitholders’ appro­val on February 23, 2023. Acquired at an en­terprise value of around Rs 15 billion, the addition of KTL to its portfolio will take IndiGrid’s assets under management to about Rs 227 billion and its overall asset base to 8,416 ckt. km of transmission li­nes and around 17,550 MVA of transformation capacity. The acquisition was funded through a combination of equity, internal accruals and debt.

• IREDA granted infrastructure finance company status by RBI

The Reserve Bank of India (RBI) has gr­an­­­ted the Indian Renewable Energy De­ve­­lop­ment Agency (IREDA) the status of an infrastructure finance company. With this, IREDA will be able to take gr­ea­ter ex­posure in renewable energy fin­ancing and access a wider investor base for fu­nd mobilisation, resulting in com­petiti­ve rates for fund raising. In another de­ve­lopment, the Cabinet Co­m­mit­tee on Econo­mic Affairs has app­roved the listing of IREDA on the stock exch­anges th­rough an initial public offering (IPO). This will be done thro­ugh part sale of  the government’s stake in it and the is­sue of fresh equity sha­res. The Depart­me­­nt of Invest­ment and Public Asset Ma­na­ge­me­nt will drive the listing process.

• Vena Energy announces financial closure of the 176 MW Gudadur hybrid power project

Vena Energy has reached financial closure for the 176 MW solar-wind hybrid Gudadur project in Karnataka. The project will comprise 48 MW of solar capacity and 128 MW of wind capacity, and is expected be commissioned by the four­th quarter of 2023. This is Vena Energy’s first green project financing arrangement in India and is supported by five mandated lead arran­gers, Hong­kong and Shanghai Banking Corpora­tion Li­mi­ted (HSBC), BNP Pari­bas Bank, Mizu­ho Bank Limited (Mizu­ho), Sumi­to­mo Mitsui Bank Corpo­ration (SMBC), and Axis Bank Limited. BNP Pa­ri­bas, Mizuho and SMBC acted as the green loan coordinators, while HSBC ­ac­ted as the acc­ount and modelling bank, and Axis Bank acted as the lenders’ agent.

• Essar to invest $3.6 billion in energy transition in the UK and India

The Essar Group has announced the formation of Essar Energy Transition (EET) to drive energy transition. EET plans to invest $3.6 billion in developing a range of low-carbon energy transition projects over the next five years, of which $2.4 billion will be invested in its site at St­an­low (in the UK), between Liverpool and Man­chester, and $1.2 billion will be invested in India. EET will invest in de­veloping a cost-efficient global supply hub for low-carbon fuels in India, in­clu­ding green hydrogen and green ammonia. Ammo­nia will be shipped from India to the UK, Europe and globally to meet the expanding market demand for green hydrogen. EET’s investment in India will also help deliver on the country’s emerging hydrogen ambition.

• PLN secures loan from Japanese banks for renewable energy projects in Indonesia (Indo­nesia)

Perusahaan Listrik Negara (PLN) has secured $200 million in loans from Nippon Export and Investment Insura­n­ce, a company owned by the Govern­ment of Japan, to develop renewable energy projects in Indonesia. The loans will support PLN’s transition from coal-fired power plants to renewable energy sources such as solar and geothermal energy from 2025. The funds will be used to advance research and development as well as to purchase electricity from renewable energy producers.