Adani Energy Solutions Ltd (AESL) has announced successful financial closure for its $1-billion Mumbai HVDC link project
This project, on which construction work is expected to start in October 2023, will enable further ‘greening’ of the Mumbai Grid by supplying more renewable power to the city while supporting its rising electricity demand.
The credit facility is part of the $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, a release from AESL said.
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 Ltd.
Mumbai growing energy demand
Mumbai’s electricity demand is expected to touch to 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 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. The link shall bulk-inject an additional 1,000 mw of renewable power into the city, thus ensuring uninterrupted power supply in future.
Incidentally, Adani Electricity Mumbai Ltd (AEML), the largest electricity distribution company, has committed to increasing the share of renewable energy in the overall mix to 60 per cent by 2027.
Why HVDC?
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 environment 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 upgrade to the city while managing all the complexities in developing such a large scale project in a city like Mumbai.
“Adani Transmission Ltd” was officially renamed to “Adani Energy Solutions Ltd,” effective July 27, 2023.
Greener future for Mumbai
“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 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.”
RTM project
According to information available with T&D India but not contained in the present AESL release, the Mumbai HVDC project is an intrastate project and is being implemented on regulated tariff mechanism (RTM) basis through a project special purpose vehicle “Adani Electricity Mumbai Infra Ltd,” a wholly-owned subsidiary of Adani Energy Solutions Ltd (AESL). The 80-km HVDC link has an underground component of 50 km, and the order for building this link has been placed on Hitachi Energy India Ltd.
Featured photograph is for representation only.
