Adani Energy Acquires Essar’s Mahan-Sipat Transmission Assets

Adani Energy Acquires Essar’s Mahan-Sipat Transmission Assets

Gujarat-based Adani Energy Solutions Ltd (AESL), through its wholly-owned subsidiary Adani Transmission Step-Two Limited (ATSTL), acquired a 100% stake in Essar Transco Limited. The private transmission and distribution company has a growing smart metering portfolio.

After obtaining requisite regulatory and other approvals the enterprise is valued at Rs.1,900 crores. The share acquisition is pursuant to definitive agreements signed in June 2022. The acquisition covers a fully operational 400 kV, 673 ckt kms inter-state transmission line linking Mahan in Madhya Pradesh to the Sipat pooling substation in Chhattisgarh. The project operates under the Central Electricity Regulatory Commission (CERC)-regulated return framework and was commissioned on 22 Sep 2018.

In accordance with Adani Energy Solutions Ltd (AESL’s) capital management philosophy, ATSTL also raised financing at the most competitive terms. This establishes a new benchmark for AESL to raise capital and unlocks the lower-cost debt for its operational assets. The financing exemplifies the quality of AESL’s utility cashflows with a long-term license life, well supported through a stable regulatory framework. MUFG Bank Ltd. is the sole lender for the financing.

The acquisition of the Mahan-Sipat transmission network will consolidate AESL’s presence in central India with 4 operating assets having 3,373 ckt km in the region. The acquisition is consistent with AESL’s philosophy of augmenting its existing capacities and bringing in efficiency through operational synergies and creating a network effect. Along with a robust energy demand, the ability to recognize and tap market opportunities within the areas of interest continues to propel and position AESL at the forefront of energy transition in India.