Business & Investment

Framework agreement!India Grid Trust has the largest transmission contract with Starlight Power

India Grid Trust, India’s first power infrastructure investment trust (InvIT), signed a share purchase agreement on Saturday to acquire NER-II Transmission Limited from Stereolite Power as part of a framework agreement.

The index value of the acquisition is Rs 462.5 billion, an increase of IndiGrid’s AUM (Assets Under Management) by 34% to over Rs 200 billion ($ 2.8 billion).

Upon completion, the platform’s asset portfolio will consist of 13 transmission projects, with a total network of 38 transmission lines and 11 substations spanning 7,570 line kilometers and 13,350 MVA in 17 Indian states and one Union Territory. I am.

NER-II is part of the Interstate Transmission Scheme (ISTS) network and was awarded on a construction, ownership, operation and maintenance (“BOOM”) basis with a 35-year contract period. The project has 11 elements, including two substations with a capacity of 1,260 MVA and four transmission lines over 830 kilometers. This asset spans Assam, Arunachal Pradesh and Tripura and is strategically important for powering in one of the harshest regions of the country. The project will strengthen the grid in the northeastern states to meet the needs of regional transmission, secondary transmission, and distribution systems.

IndiGrid signed a framework agreement with Stereo Power in April 2019 to acquire NER-II during a test run. The transaction is expected to close during the fourth quarter of 2009, subject to unitor approval, regulatory approval, and other customary closing adjustments. The acquisition will be funded by a combination of preferential issuance in May 2019 and internal accruals, liabilities and equity income from future rights issues. After this acquisition, net debt / AUM will be 64%.

Harsh Shah, CEO of IndiGrid, said of the acquisition: “We are excited about the acquisition of NER-II, one of India’s largest acquisitions in India’s power transmission sector. NER-II is an operating asset with long-term cash flow and minimal counterparty risk. The focus is on this acquisition, which is an increase in DPU and will, for a considerable period of time, increase the increase in DPU to 12.40 rupees per year. “

Pratik Agarwal, Managing Director of Sterlite Power, commented on the deal, saying, “This megatransmission project will help provide reliable electricity to people in northeastern India for Rs 530 million.”

Since the last round of financing, IndiGrid has acquired Rs 8,300 assets, including a Rs 7,100 Framework / ROFO project from Sterlite Power and the first cost plus transmission assets from Reliance Infrastructure. It also plans to acquire 138 MW of solar assets and announced its entry into the renewable energy sector. Separately, in 2009, KKR was introduced as a sponsor following the preferential issuance of Rs 2,510 in 2019, which KKR and GIC subscribed to among other marquee investors. KKR also acquired a majority stake in investment managers

Framework agreement!India Grid Trust has the largest transmission contract with Starlight Power Framework agreement!India Grid Trust has the largest transmission contract with Starlight Power

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