India Grid Trust (IndiGrid), India’s first power sector investment infrastructure trust (InvIT), experienced some very interesting developments in the recent past. These included winning a greenfield TBCB project, securing additional transmission components under the RTM route and signing of a framework agreement with G R Infraprojects. In this email interview, Harsh Shah, Chief Executive Officer, India Grid Trust, tells us more on these developments, whilst maintaining that IndiGrid would continue to remain interested in bidding for both interstate and intrastate TBCB-based transmission schemes. An interaction by Venugopal Pillai.
Please confirm that India Grid Trust (IndiGrid) will acquire 100 per cent ownership in Rajgarh Transmission Ltd from GR Infraprojects, only after the project is commissioned, which is by November 2023, as we understand.
India Grid Trust and G R Infraprojects (GRIL) have entered into a framework agreement to acquire 100 per cent stake in Rajgarh Transmission Ltd (RTL), which GRIL had won in March 2022.
IndiGrid shall acquire in one or more tranches 100 per cent economic interest, shareholding and management control in RTL subject to the terms of definitive agreements and requisite regulatory approvals.
As per the TSA, the scheduled project commissioning of RTL is expected by November 2023.
For future TBCB projects, we learn that IndiGrid would be jointly bidding with GRIL. Will there be a joint venture between IndiGrid and GRIL, or is it that IndiGrid (or its subsidiary/subsidiaries) would be the sole developer and that GRIL would be looking after the project execution without any equity involvement? Please discuss.
IndiGrid and GRIL have signed a MoU to jointly bid for identified TBCB (tariff based competitive bidding) transmission projects aggregating to approximately Rs.5,000 crore. The exact structure including whether IndiGrid investing some minority equity or acquire 100 per cent upon commercial operations date (COD), would vary with respect to each identified project depending on the size of the project, any synergies that IndiGrid has through its existing projects, etc.
For the projects identified under the MoU, IndiGrid doesn’t intend to be the sole developer.
We understand that IndiGrid has been assigned an RTM component project with respect to Kallam Transmission. This, as we know, is “augmentation of transformation capacity at Kallam Pooling Station” What is the current status of this project and when is the likely completion date?
Yes, IndiGrid has been assigned a transmission scheme associated with Kallam Transmission Ltd (KTL). This project is to be implemented through the regulated tariff mechanism (RTM) route and shall follow the CERC tariff regulations. The scope involves augmenting transformation capacity at Kallam Polling Station by 2×500 MVA, 400/220kV ICTs along with 220kV bays. The estimated capex of the project is Rs.157 crore and the scheduled commissioning date is May 2024.
We have filed for the transmission license and completed the International Competitive Bidding (ICB) to select the EPC contractor. We believe that the project will be commissioned within the stipulated time.
We also understand that Patran Transmission Company Ltd (PTCL) was recently awarded an RTM project entailing the installation of the third transformer at the 1,000-MVA Patran GIS substation. When are you expected to start work on this project? Also, when is the tariff adoption by CERC likely to take place?
Yes, IndiGrid has been assigned a transmission scheme associated with Patran Transmission Company Ltd (KTL). This project is also to be implemented through the regulated tariff mechanism (RTM) route and shall follow the CERC tariff regulations. The scope involves augmenting transformation capacity at Patran Substation by 1×500 MVA, 400/220kV ICT along with 400kV and 220kV bays.
The estimated capex of the project is Rs.65 crore and the scheduled commissioning date is August 2024.
We have already started work on this project and have obtained the transmission license. WE are now in process of executing the project. RTM projects are awarded under Section 62 of Electricity Act, 2003 and the tariff for such projects is determined by CERC post commissioning of project.
Please confirm that IndiGrid owns 74 per equity, acquired from Techno Electric Engineering and its associates, in Patran Transmission Company Ltd (PTCL). In one of IndiGrid’s official communication, it was stated that IndiGrid has 100 per cent “economic ownership” in PTCL. What exactly does this mean and imply?
As on date, IndiGrid owns 100 per cent equity ownership in Patran Transmission Company Ltd (PTCL). While IndiGrid had 100 per cent economic ownership since February 2018 onwards, the legal transfer of equity shares of PTCL was done in three tranches, in line with lock-in restrictions in the TSA.
In February 2018, 46 per cent equity stake was acquired and other 28 per cent in November 2018. The balance 28 per cent was acquired in November 2021.
The term “economic ownership” means that while IndiGrid does not own 100 per cent equity shares, IndiGrid has 100 per cent control over the cash flows of PTCL, voting rights and pledge over 100 per cent of the equity shares.
Apart from Kallam and Patran discussed above, are there any other RTM projects in IndiGrid’s current portfolio?
Yes, in addition to Kallam and Patran, there are augmentations works in Gurgaon-Palwal Transmission Ltd (GPTL), NRSS XXIX Transmission Ltd (NTL) and few other SPVs in IndiGrid’s portfolio.
Would IndiGrid be interested in bidding for intrastate transmission schemes under the TBCB modality? Has IndiGrid bid for any such schemes so far?
IndiGrid is actively evaluating transmission schemes under TBCB modality and would be interested in bidding either independently or jointly for intrastate transmission schemes, subject to SEBI InvIT Regulations.
What is IndiGrid’s current transmission portfolio in terms of number of project SPVs, transmission line length, transformation capacity, etc?
IndiGrid’s transmission portfolio consists of 16 transmission projects — 15 operational and one (Kallam Transmission Ltd) under construction. IndiGrid’s transmission portfolio is spread across 19 states and 1 Union Territory with 8,468 ckm of transmission line length and 13 substations aggregating 17,500 MVA of transformation capacity.
