Adani Energy Solutions attains financial closure for its $1 bn green loan facility from 9 banks

• The project will enable further ‘greening’ of the Mumbai Grid by supplying more renewable power to the city, even as the demand for electricity continues to rise in the country’s financial capital.
• The HVDC transmission link will ensure uninterrupted supply of renewable power to Mumbai and is highly critical given the city’s transmission capacity constraints amidst its fast-rising energy demand.
• The project will help increase the share of renewable power in the overall mix to 60% by 2027.
  

Adani Energy Solutions Limited (AESL), India’s largest private utility and energy solutions company, on Monday announced the financial closure for its $1 billion Green HVDC link project. The project will enable further ‘greening’ of the Mumbai Grid by supplying more renewable power to the city, even as the demand for electricity continues to rise in the country’s financial capital.

The credit facility is part of the $700 million revolving project finance facility tied up in October 2021 for the company’s transmission assets, which are currently under construction. This unique platform infrastructure financing framework funds various under-construction assets and gives access to funds that another project in the portfolio has paid back. Such an effective one-time structure ensures continuous and consistent access to capital for all future projects in AESL’s transmission portfolio.

“This link is the need of the hour for the city and will support its growth aspirations. It showcases our commitment to offering Mumbai a brighter and greener future. The project will help accelerate the city’s decarbonization and its net zero journey.” said Mr. Anil Sardana, MD, AESL. “We would like to express our sincere appreciation to our banking partners for their continued support in completing the transaction smoothly and for their enduring faith and confidence in AESL.”

The consortium of banks for the platform infrastructure financing framework comprised nine international banks including DBS Bank, Intesa Sanpaolo S.p.A., Mizuho Bank, MUFG Bank, Siemens Bank GmbH, Société Générale, Standard Chartered Bank, Sumitomo Mitsui Banking Corporation and The Hong Kong Mortgage Corporation Limited.

Mumbai’s electricity demand is expected to touch 5,000 MW by FY25 from the current peak demand of 4,000 MW. The island city has only 1,800 MW of embedded generation capacity and the existing transmission corridors face capacity constraint risks. On 12th October 2020, the entire city witnessed a major power blackout event due to the grid constraints.

The HVDC transmission link will enhance grid stability by providing an interface with the state and national grids. The link shall bulk inject an additional 1,000 MW of renewable power into the city, thus ensuring uninterrupted power supply in future. Adani Electricity Mumbai Ltd (AEML), being the largest electricity distribution company, has committed to increasing the share of renewable energy in the overall mix to 60% by 2027.

The HVDC transmission technology is superior to other conventional technologies as it stabilizes power distribution networks where sudden new loads or blackouts in one part of the network may lead to synchronization problems and cascading failures. Besides, it is the only technology suitable for islands where submarine cables are used for procuring power supply. More importantly, it is the most environmentally friendly option as it transmits more energy per square meter as well as results in lower energy losses. Adani Energy Solutions is the only private player with experience of installing HVDC transmission lines in India and in record time.

The 80 km multi-faceted project will offer a technological upgradation to the city while managing all the complexities in developing such a large scale project in a city like Mumbai. The construction work for this link will begin in October 2023.

The Facility is also certified as “Green Loan” by Sustainalytics and shall support the transmission of clean energy. This unique financing framework is the first-of-its-kind project finance structure and has earned multiple accolades – Project Finance International’s Asia-Pacific Indian deal of the year 2021 and AAA Asset’s Most Innovative Deal of the year 2021 as well as IJ Global’s Portfolio Financing Deal of the year 2021.

Adani Energy Solutions Limited (AESL) is the transmission and distribution business arm of the Adani Portfolio. AESL’s transmission assets have presence across 14 states of India and a cumulative transmission network of 19,778 circuit kilometres, out of which 15,926 km are operational and 3,852 km are in various stages of construction.