Adani Group Acquires Essar Power's Transmission Business in Central India, Accelerates ESG

Published on: 04 June 2022
by KnowESG

Essar Power Transmission Company (EPTCL) and Adani Transmission (ATL) have reached a definitive deal to sell one of Essar Power's two transmission lines for Rs 1,913 crore. The deal is expected to boost environmental, social and governance (ESG) activities.

EPTCL has 465 kilometres of transmission lines that go through three states. The Essar group is selling a functioning 400 kV inter-state transmission line that connects the Mahan power station in Madhya Pradesh to the Sipat pooling substation in Chhattisgarh in India. The CERC-regulated return mechanism governs the project.

Anil Sardana, managing director and chief executive officer of Adani Transmission, said, "ATL is well on a path to achieve its 20,000 ckt km target before time."

The acquisition is in keeping with ATL's value-added growth strategy, including organic and inorganic expansion.

ATL will have a total network of 19,468 ckt km, with 14,952 ckt km in operation and 4,516 ckt km in various phases of completion with this acquisition. ATL will benefit from synergies in terms of O&M cost optimisation and shared resources as a result of the agreement.

The sale is part of Essar Group's effort to reduce debt across companies. Essar Power has reduced its debt from around Rs 30,000 crore to Rs 6,000 crore in the last three years. In addition, Essar Power is developing a green balance sheet centred on renewable energy, which aligns with Essar's objective of investing in future-focused enterprises.

Kush S, CEO of Essar Power, said:

"With this transaction, Essar Power is rebalancing its power portfolio with the twin objectives of deleveraging its balance sheets and investing in green and renewable power, thereby furthering its ESG-oriented future growth."

According to the CEO, Essar Power has a current power generating capacity of 2,070 Mw spread among four plants in India and Canada.

According to a corporate official, this is part of a deleveraging strategy in which Essar has repaid over Rs 1.80 trillion to banks and financial institutions in the last three years, making it India's highest debt repayment.

Source: Business Standard

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