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Vedanta's Sterlite Power Transmission ties up Singapore's GIC for $1- bn joint venture

Vedanta Group's Sterlite Power Transmission Limited has joined hands with Singapore's sovereign wealth fund, GIC, to create a $1-billion joint venture platform. The new alliance has been formed to encash the renewable energy boom in the country by tapping the growing demand for power evacuation networks, Economic Times reported on Wednesday.


As per the company details, Sterlite Power, controlled by billionaire Anil Agarwal, has 34,000 km+ OPGW (optical ground wire) -based communication projects under live line conditions completed or under execution with 108 critical corridors in 15 states.


The firm is also a leading manufacturer of power cables, conductors and OPGW, supplying to all major states in India and private utilities besides exporting to 60+ countries. It has manufacturing assets in Silvassa, Jharsuguda and Haridwar.


Sterlite Power's Global Infrastructure business line bids for, designs, constructs, owns and operates power transmission assets and currently has operations in India and Brazil.


According to Crisil, Sterlite Power has a 31.5 per cent market share, by tariff of inter-state projects awarded under competitive bidding in India.


At present, SPTL is demerging its operations into two businesses. One part will house the infrastructure division that develops and operates power transmission assets on a build-operate-transfer (BOT) basis, typically in 30-year concessionaire agreements. This is on a turnkey basis for third-party buyers such as state transmission utilities.


GIC is planning to deploy $500 million in the infrastructure business for a 49 per cent stake. The investment will take place in tranches, with an initial $100 million and $400 million to come in over the next two to three years, which will be based on requirement, the report said.


This will be linked to Sterlite Power winning transmission project tenders and planned capex.


On the other hand, Sterlite Power will transfer four assets with an enterprise valuation of Rs 6,000 crore ($722.60 million) into the new venture.


Besides, the company is planning to pump in around Rs 1,700-Rs 2,500 crore in cash over a similar two-to-three-year timeframe, as well as deploy its capabilities to maintain its 51 per cent stake in the alliance.


According to the report, GIC is planning to be the exclusive partner of Sterlite in India in the transmission segment to try and gain a larger share of the market, which has seen annual cumulative projects worth Rs 10,000-12,000 crore bid out every year during 2010-22.


There is also a commitment to deploy capital even beyond the $500 million initially earmarked.


Sterlite Power is the sponsor of India's first power sector InvIT, India Grid Trust (IndiGrid) that is listed. Pratik Agarwal, the MD of Sterlite Power, is the nephew of Anil Agarwal.


In September 2022, the power firm announced that it had withdrawn its DRHP and deferred its listing plans due to unfavourable market conditions.


In August, Sterlite Power said it has acquired Fatehgarh III Beawar Transmission, a special-purpose vehicle, from PFC Consulting Limited.


PFC Consulting Limited (PFCCL) is a wholly-owned subsidiary of Power Finance Corporation Limited under the Ministry of Power.


"Sterlite Power acquires Fatehgarh III Beawar Transmission Project in Rajasthan from PFC. The project was awarded to Sterlite Power through tariff-based competitive bidding process in March 2023," the company said in a statement.

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