AMP Capital, Sterlite Power join hands for energy transmission projects

Global investment manager AMP Capital has partnered with Sterlite Power Transmission Limited for the development of energy transmission projects in India.

AMP Capital and Sterlite Power will each invest $150 million initially to develop four transmission projects, and have put in place debt financing, which represents a total capital outlay of around $1 billion, the company said.

They will provide the critical infrastructure required for evacuating power from multiple renewable energy generation projects and will strengthen the power delivery infrastructure in the country. These projects have a circuit length of nearly 1,800 km of transmission lines across the western, southern and north-eastern regions of India. This partnership marks the first investment in India for AMP Capital’s global infrastructure equity strategy.

Further, the partners may in the future contribute further capital for new inter-State transmission projects that are expected to be tendered by the government. Industry watchers estimate that the partnership has the potential to reach an overall investment size of $500 million.

Sharat Goyal, Head of India, Infrastructure Equity at AMP Capital, said: “AMP Capital and Sterlite Power believe that this is a unique partnership bringing together operational and investment expertise to support the hitherto under-invested construction phase of power infrastructure in India. Our investment will create a pool of valuable transmission assets, with long-term contractual arrangements and a robust payment security framework, which are extremely attractive to yield-seeking investors.”

India is a key target market for AMP Capital and this investment capitalises on the opportunity presented by the Indian infrastructure sector at this time, as well as benefiting from policy initiatives like Infrastructure Investment Trusts (InvITs) which have created transparent, market-driven exit opportunities for investors willing to invest capital in the development of greenfield infrastructure projects in India, added Goyal

Pratik Agarwal, Managing Director, Sterlite Power, said: “We are driven by our core purpose to enable access to reliable power while minimising the impact on climate change. The world is undergoing a clean-energy revolution and India is leading this effort with its mammoth target of 450GW by 2030.”

AMP Capital was advised by Citigroup (financial), PwC (commercial and tax) and AZB (legal). Sterlite was advised by Moelis & Company and Credit Suisse, (financial), Khaitan & Co (legal), and EY (tax).

Recently, Sterlite Power acquired VNLTL SPV in June 2020 to execute one of the largest inter-State transmission system projects covering Western Region Strengthening Scheme-XIX and North Eastern Region Strengthening Scheme-IX. This single project, with its various sub-elements, will supply clean and green energy from solar, nuclear and hydro power to the western and north eastern region of India, Sterlite said.

Source: thehindubusinessline