Power Transmission Company Sterlite Raises ₹2 Billion from Allianz Global Investors

The transaction is Allianz GI’s first infrastructure sector financing deal in India

January 11, 2021


Sterlite Power, a power transmission infrastructure developer, has announced that it raised ₹2 billion ($27.23 million) in debt financing from leading investment managers Allianz Global Investors (Allianz GI), focusing on sustainable investments.

The transaction is one of the first infrastructure sector financing deals for Allianz GI in India. The amount was raised through a non-convertible debenture with a three-year tenure and is part of the larger refinancing exercise undertaken by Sterlite to reduce its holding company borrowings.

Sterlite Power is has been focusing on integrating renewable energy into the grid.

Commenting on the transaction, Pratik Agarwal, managing director, Sterlite Power, said, “This transaction with Allianz GI is a strong validation of the continued trust reposed on us by the banking and investor community, and the rise of power transmission as an asset class with promising returns.  We remain focused on our endeavor towards greening the grid by delivering some of the most challenging and impactful transmission projects in the country.”

Sterlite Power said that it has been concluding a significant number of financial deals with leading global and national investors. It has raised project finance from both private and public sector financial institutions like HDFC Bank, Power Finance Corporation, and REC Limited for its transmission projects that are playing a vital role in the evacuation of renewable energy.

The company recently announced an equal partnership with global investment manager AMP Capital to develop greenfield power transmission projects in India. The two companies will initially invest around $150 million to develop four transmission projects in the country. They will also bring in debt financing with a total capital outlay of about $1 billion.

Sterlite had also secured the financial closure for its Vapi II North Lakhimpur Transmission Limited. The total debt funding of ₹20.7 billion (~$281 million) came from Power Finance Corporation. Sterlite Power is also constructing transmission assets in the states of Maharashtra, Gujarat, Assam, and Arunachal Pradesh, including critical corridors that are part of India’s Green Energy Corridor.

The company also sold a 14.7% stake in the India Grid Trust for ₹8.4 billion (~$112.2 million) to institutional and high net-worth individual investors. IndiGrid is an infrastructure investment trust (InvIT) established by Sterlite Power Grid Ventures to own inter-state power transmission assets in India.

Sterlite earlier said that it will join hands with GE T&D India, Unitech Power Transmission, Tata Projects, and Associate Power Structures to develop the Lakadia Vadodara Transmission Project Limited under the Green Energy Corridor. The project connects the wind energy zones of Gujarat to the load centers in Gujarat and Maharashtra. The project involves laying over 300 km of 765 kV double-circuit transmission lines connecting 765/400 kV Lakadia substation to the Vadodara substation in Gujarat.

Rahul is a staff reporter at Mercom India. Before entering the world of renewables, Rahul was head of the Gujarat bureau for The Quint. He has also worked for DNA Ahmedabad and Ahmedabad Mirror. Hailing from a banking and finance background, Rahul has also worked for JP Morgan Chase and State Bank of India. More articles from Rahul Nair.