PFC Approves Nearly ₹21 Billion for Sterlite's ISTS Project Connecting West & Northeast

Mumbai-based power transmission company Sterlite Power secured the financial closure for its Vapi II North Lakhimpur Transmission Limited (VNLTL). Sterlite said that the total debt funding of ₹20.7 billion (~$281 million) came from Power Finance Corporation Limited (PFC Ltd).

The financial closure was achieved within four months of the special purpose vehicle’s acquisition of the project. Sterlite Power acquired VNLTL SPV in June 2020 to execute an inter-state transmission system (ISTS) project covering connecting the northeast with western India. The project is expected to supply renewable energy from solar, nuclear, and hydropower sources to India’s western and northeastern regions.

Under the project, Sterlite would set up 179 km long power lines for critical system strengthening and decongest the Navi Mumbai transmission corridor by bringing in an inter-state transmission feed of about 1 GW. The link will feed the region’s power needs, especially the Navi Mumbai Airport and the Special Economic Zone.

Managing Director of Sterlite Power, Pratik Agarwal, said, “This deal is a huge show of trust by PFC in our capability to deliver some of the most challenging and impactful transmission projects in the country. This month, we also inducted REC Ltd. as the lead lender for Lakadia Vadodara Transmission Project Ltd, our Green Energy Corridor project. We are an active proponent of greening the grid, and we see about 80% of our new projects to be linked to transportation of renewable energy.”

In July, the company said it also refinanced its Gurgaon Palwal Transmission project with HDFC Bank.

Sterlite achieved the Lakadia Vadodara transmission project’s financial closure by securing ₹20.24 billion (~$274.86 million) in funding.  This project would connect the wind energy zones of Gujarat to the load centers in Gujarat and Maharashtra. The company also announced that it would join hands with GE T&D India Limited, Unitech Power Transmission Limited, Tata Projects Limited, and Associate Power Structures to develop the Lakadia Vadodara transmission project the Green Energy Corridor. The project connects the wind energy zones of Gujarat to the load centers in Gujarat and Maharashtra.

To focus on the core business as a developer of power transmission assets, the company also sold a 14.7% stake in the India Grid Trust (IndiGrid) for ₹8.4 billion (~$112.2 million).

The company is ramping up its technology for grid efficiency and signed an agreement with U.S.-based Smart Wires. The technology named ‘SmartValveTM’ is expected to allow utilities to optimize the use of their existing transmission capacity and enhance grid flexibility.