Adani Energy Solutions secures $1bn financing for HVDC link project in Mumbai
Adani Energy Solutions Limited (AESL) has secured financing for its $1 billion green High Voltage Direct Current (HVDC) link project in Mumbai. The project aims to supply more renewable power to the city while supporting its rising electricity demand. AESL has achieved $700 million financial closure with nine international banks for the HVDC transmission link between Kudus and Aarey in Mumbai. Construction is set to begin in October 2023. The link will ensure uninterrupted supply of renewable power to Mumbai, which is facing transmission capacity constraints and a fast-rising energy demand.
Mumbai: In what could prove to be a shot in the arm for the supply of renewable energy to the city, Adani Energy Solutions Limited (AESL) has announced that it has secured financing for its US$1 billion green High Voltage Direct Current (HVDC) link project in Mumbai.
The HVDC power systems use direct current (DC) for transmission of bulk power over long distances. These lines are considered to be less expensive and incur losses less than the AC transmission.
This project will enable further ‘greening’ of the Mumbai Grid by supplying more renewable power to the city while supporting its rising electricity demand, the company said in a press release.
The AESL has achieved US$700 million financial closure with nine international banks for its under-construction HVDC transmission link between Kudus to Aarey, in the city, the release said.
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, said a spokesperson of the company.
The HVDC transmission link will ensure uninterrupted supply of renewable power to the city of Mumbai and is highly critical given the city’s transmission capacity constraints amidst its fast-rising energy demand, the release said.
The project is in line with AESL’s commitment to increase the share of renewable power in the overall mix to 60% by 2027; it has already achieved its first major target of 30%, added the release.
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.
On October 12, 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.
Besides, it is the only technology suitable for islands where submarine cables are used for procuring power supply. It is an environmentally friendly option as it transmits more energy per square meter as well as results in lower energy losses.
Mumbai’s electricity demand is expected to touch 5,000 MW by the financial year 2025 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.
The link shall inject an additional 1,000 MW of renewable power into the city, thus ensuring uninterrupted power supply in future, the company said.
“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 decarbonisation and its net zero journey.” said 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 endured faith and confidence in AESL,” said Sardana.
The credit facility is part of the US$700 million revolving project finance facility tied up in October 2021 for its under-construction transmission assets portfolio.
This unique Platform Infrastructure Financing Framework that funds various under-construction assets offers project 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, said a spokesperson of the AEML.
The banking consortium for the platform infrastructure financing framework comprised nine international banks including DBS Bank Ltd., Intesa Sanpaolo S.p.A., Mizuho Bank Ltd., MUFG Bank Ltd., Siemens Bank GmbH, Société Générale, Standard Chartered Bank, Sumitomo Mitsui Banking Corporation and The Hong Kong Mortgage Corporation Limited.
