Mumbai: Adani Energy Solutions Limited (AESL) recently announced the successful financing of its green High Voltage Direct Current (HVDC) link project in Mumbai, totaling a staggering $1 billion.
HVDC power systems, which utilize direct current (DC) for transmitting bulk power over long distances, are known for being cost-effective and generating lower losses compared to AC transmission. This exciting project will not only contribute to the greening of the Mumbai Grid but also satisfy the city’s expanding electricity demands by supplying a greater amount of renewable power.
According to a press release, AESL has secured $700 million in financing from a consortium of 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.
The 80-km comprehensive project will bring technological advancements to the city of Mumbai while efficiently managing the complexities involved in developing such a large-scale undertaking. According to a company spokesperson, construction for this link is scheduled to commence in October 2023.
As mentioned in the release, the HVDC transmission link will ensure a continuous supply of renewable power to Mumbai, which is of utmost importance considering the city’s transmission capacity limitations amidst its rapidly growing energy demands. This project aligns with AESL’s commitment to increasing the proportion of renewable energy in the overall energy mix to 60% by 2027; the release also highlighted that the company has already achieved its initial milestone of 30%.
Benefits of HVDC transmission technology
- It 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.
- The HVDC transmission link will enhance grid stability by providing an interface with the state and national grids.
- 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.
By FY 2025, Mumbai’s electricity demand is expected to touch 5,000 MW 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 the 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.
