Vedanta's Sterlite Power and Singapore's GIC Forge $1 Billion Joint Venture

26 Oct, 2023

Vedanta's Sterlite Power and Singapore's GIC Forge $1 Billion Joint Venture

Vedanta Group's Sterlite Power Transmission Limited has inked a significant collaboration with Singapore's sovereign wealth fund, GIC, forming a $1 billion joint venture platform. This strategic partnership is aimed at leveraging the burgeoning renewable energy landscape in India and addressing the increasing need for power evacuation networks, as reported by the Economic Times.

Sterlite Power, under the leadership of billionaire Anil Agarwal, boasts an impressive track record, with over 34,000 km of OPGW (optical ground wire) -based communication projects either completed or in progress under live line conditions. These projects span across 108 critical corridors located in 15 states of India. Additionally, the company is a prominent manufacturer of power cables, conductors, and OPGW, supplying to major states and private utilities in India, while also exporting to more than 60 countries. Sterlite Power possesses manufacturing assets in Silvassa, Jharsuguda, and Haridwar.

Sterlite Power's Global Infrastructure business segment specializes in bidding for, designing, constructing, owning, and operating power transmission assets. Its operations extend to both India and Brazil. Currently, Sterlite Power is in the process of demerging its operations into two distinct businesses. One segment will house the infrastructure division, responsible for the development and operation of power transmission assets under build-operate-transfer (BOT) agreements, typically spanning 30-year concessionaire agreements. These projects are executed on a turnkey basis and cater to third-party buyers, including state transmission utilities.

GIC Singapore plans to invest $500 million in Sterlite Power's infrastructure business, securing a 49% stake. This investment will be carried out in phases, with an initial infusion of $100 million, followed by the remaining $400 million over the next two to three years, based on project requirements and execution.

Concurrently, Sterlite Power will transfer four assets valued at Rs 6,000 crore ($722.60 million) into the newly established joint venture.

Notably, Sterlite Power holds the distinction of being the sponsor of India's inaugural power sector Infrastructure Investment Trust (InvIT), India Grid Trust (IndiGrid), which is publicly listed. Pratik Agarwal, the Managing Director of Sterlite Power, is the nephew of Anil Agarwal.

In September 2022, the power company announced the withdrawal of its Draft Red Herring Prospectus (DRHP) and the postponement of its listing plans due to unfavorable market conditions.