IndiGrid wins its first greenfield transmission project

Having build its portfolio so far through acquisitions, India Grid Trust (IndiGrid) has won its first greenfield power transmission project, the power sector infrastructure investment trust (InvIT) said in a release.

IndiGrid, India’s first power sector InvIT, has received the letter of intent (LOI) from REC Power Development & Consultancy Ltd (RECPDCL) to establish a transmission system for evacuation of power from renewable energy projects in Osmanabad area in Maharashtra.

 

This project, envisaged on build, own, operate and maintain (BOOM) basis for a period of 35 years, was awarded through the tariff based competitive bidding (TBCB) mechanism.

 

The project

The project, with a planned outlay of around Rs.170 crore, will consist of one substation of 2×500 MVA, a 400/220kV near Kallam and 10 bays with a LILO multi-circuit line of around 18 km. The project will strengthen the transmission system in Maharashtra by improving the grid availability for evacuation and integration of renewable energy in the state. The project is situated in a low-risk plain topography and is proposed to be completed over the next 15-18 months.

 

Kalam Transmission

According to information available with T&D India but not officially released by IndiGrid, the project SPV that will be developing the transmission project in question is “Kalam Transmission Ltd” that was incorporated in May 2020 by RECPDCL. Besides, the project was won by a consortium of two IndiGrid subsidiaries – IndiGrid 1 Ltd and IndiGrid 2 Ltd. As per the standard practice, the ownership of “Kalam Transmission Ltd” will be transferred to IndiGrid.

 

Organic Growth

Commenting on the development, Harsh Shah, Chief Executive Officer, said: “We remain focused on delivering predictable, stable and growing DPU to our unitholders. We plan to channelize incremental net distributable cash flow (“NDCF”) and reserves after meeting the DPU guidance, which will enable growth in NDCF in subsequent years. Over the last few years, we have built substantial inhouse capabilities to undertake such projects. While resource deployment towards such greenfield project will remain a small part of the portfolio, it will enable organic growth opportunities for IndiGrid.

We believe that the electricity sector in India is poised for significant investment over the next 3-5 years given the decadal shift in demand patterns, supportive regulatory push, and technological advancements. We remain focused to participate in the growth cycle by partnering for accretive opportunities in transmission and solar sector.”

 

IndiGrid Portfolio

IndiGrid currently owns 14 operating power projects consisting of 40 transmission lines with more than 7,570 ckm length, 11 substations with 13,550 MVA transformation capacity and 100 MW (AC) of solar generation capacity. IndiGrid has assets under management (AUM) of over Rs.214 billion ($2.85 billion). The investment manager of IndiGrid is majority owned by KKR.

 

Featured photograph is for representation only