Adani Transmission to acquire Essar’s Mahan-Sipat transmission project

Ahmedabad, June 4, 2022

Adani Transmission Ltd. (ATL), India’s largest private sector transmission and distribution company, today said it had signed definitive agreements with Essar Power Ltd. (EPL) for acquiring the 673 ckt kms operational Mahan-Sipa inter-state transmission project owned and operated by Essar Power Transmission Ltd. (EPTCL).

The enterprise value for the transaction is Rs 1,913 crore, a press release from the Adani Group said.

Anil Sardana, MD & CEO, Adani Transmission Ltd said, “The acquisition ofEssar’s transmission asset will consolidate ATL’s presence in central India. With this acquisition, ATL is well on path to achieve its 20,000 ckt kms target before time. We continue to remain at the forefront of grid stability and provide sustainable, reliable, and affordable energy solutions while creating long term sustainable value for our stakeholders.”

The target asset is an operational 400 kV inter-state transmission line linking Mahan in Madhya Pradesh to Sipat pooling sub-station in Chhattisgarh with line length of 673 ckt kms. The project operates under the CERC-regulated return framework and was commissioned on September 22, 2018.

The proposed transaction will be executed through transaction steps which shall be subject to necessary regulatory approvals and other consents, the release said.

"The acquisition is in line with ATL's value added growth strategy through organic as well as inorganic growth opportunities. With this acquisition, the cumulative network of ATL will reach 19,468 ckt kms, out of which 14,952 ckt kms is operational and 4,516 ckt kms is under various stages of execution.

"Further, with this scale of operations, ATL will derive synergies in terms of O&M cost optimization and shared resources. It will also fortify its position of being the largest private sector transmission and distribution company in the country," the release said.

"The asset will be operated in line with ATL’s operational excellence framework committed to the highest standard of Environment, Social and Governance (ESG) aspects. ATL is committed to UN Sustainability Development Goals (SDGs) with focus on SDG 7 (affordable and clean energy), SDG 11 (sustainable cities and communities) and SDG 13 (Climate Action). ATL has also declared its Energy Compact Goals as part of COP26, primarily adhering to SDG 7. With its strong focus on green infrastructure, ATL will continue to enable the Climate Action agenda," the release added.

Adani Transmission Limited (ATL) is the transmission and distribution business arm of the Adani Portfolio.

Essar Power Limited, one of India's first private sector independent power producers, said Essar Power Transmission Company Limited (EPTCL) has 465 km of transmission lines across three states.

During the last three years Essar Power has reduced its debt from a peak level of approximately Rs 30,000 crore to Rs 6,000 crore. Alongside this, Essar Power has been in the process of curating a green balance sheet around renewable energy which is in line with Essar’s strategy of investing in future-centric businesses which give a superior rate of return within the ESG framework.

Kush S, CEO, Essar Power Ltd said, “With this transaction, Essar Power is rebalancing its power portfolio with the twin objective of deleveraging its balance sheets and investing in green and renewable power, thereby furthering its ESG-oriented future growth. Essar Power has a current power generating capacity of 2,070 MW across four plants in India and Canada.”

NNN