IndiGrid to Acquire North Eastern Transmission Project ‘NER-II’ From Sterlite

IndiGrid has signed documents for the acquisition of a 100 percent equity stake in NER II Transmission from Sterlite Grid for Rs 4,625 crore.

IndiGrid has announced that it has signed binding documents for the acquisition of a 100 percent equity stake in NER II Transmission from Sterlite Grid for no more than Rs 4,625 crore. The sale of the transmission asset from Sterlite Grid – a wholly-owned subsidiary of Sterlite Power (one of the sponsors of IndiGrid) – will be completed upon the receipt of unit-holders’ consent, regulatory and other relevant approvals which is being anticipated to be by Q4 of the current fiscal.

NER-II is part of the Inter-State Transmission Scheme network and was awarded on a Build, Own, Operate, Maintain basis with a contractual period of 35 years. It has been planted to strengthen the power transmission network in the North Eastern States and address the transmission, sub-transmission, and distribution system needs of the region.

The transmission project has 11 elements including two substations of 1,260 MVA capacity and four transmission lines extending over 830 circuit kilometers. The asset spans Assam, Arunachal Pradesh and Tripura and is of strategic importance for the delivery of power in one of the toughest regions in the country.

The indicative value of the acquisition is Rs 4,625 crore and would boost IndiGrid’s asset under management (AUM) by 34 percent to over Rs 20,000 crore (USD 2.8 billion). Post completion, the platform’s asset portfolio would consist of 13 power transmission projects, with a total network of 38 power transmission lines and 11 substations extending over 7,570 circuit kilometers and 13,350 MVA in 17 Indian states and 1 Union Territory.

“NER-II fits well with our strategy of focusing on operating assets with long-term cash flows and minimal counter-party risk. This acquisition would be DPU (distribution per unit) accretive and augment our recent increase of DPU to Rs 12.40 per annum for a considerable period,” Harsh Shah, Chief Executive Officer of IndiGrid, said.

IndiGrid has acquired Rs 8,300 crore worth of assets since the last capital raise including Rs 7,100 crore of Framework/ROFO projects from Sterlite Power and the first cost-plus transmission asset from Reliance Infrastructure. 

It has also announced its foray into the renewables sector with the planned acquisition of 138 MW solar assets. The most recent of which is its acquisition of the 100 MW Indian solar portfolio of Madrid-based developer Fotowatio Renewable Ventures (FRV), in a deal worth Rs 660 crore.

The KKR-owned Infrastructure Investment Trust (InvIT) had announced that it has signed a securities purchase agreement for the acquisition of 100 percent shareholdings in two SPVs – FRV Andhra Pradesh Solar Farm-I & FRV India Solar Park II – from FRV Solar Holdings.