Power transmission has an annuity model and is a 30-year investment, which is lucrative for countries such as Brazil, he added. “The global power transmission market is growing. We are also on the same tangent. For Brazil, we are hiring aggressively and expanding our presence,” said Agarwal.
Last December, Sterlite Power won one of the largest power transmission projects in Brazil worth $800 million. This took the company’s total investment to $1 billion. Other players in the fray were State Grid of China, Engie Elecnor and Power Grid Corporation of India. The project accounts for more than 40 per cent capacity of the 11 projects that Brazil has put up for auction.
Sterlite Power sponsored the first infrastructure investment trust (InvIT) for the power sector IndiGrid. IndiGrid currently has assets worth Rs 53 billion. It recently made a third party acquisition of Techno Electric’s Patran Transmission Company by investing Rs 2.3 billion.
The Indian market, which in the past three years saw an influx of large transmission projects, is now devoid of any tender by the Centre.
According to industry report, power transmission projects which were supposed to be awarded through competitive bidding to private players are yet see light of the day. At the same time, projects’ valuation have reduced by more than 90 per cent in the past three years.
Agarwal said, “Most of the large scale investment at the inter-state level is done except the plan to connect renewable rich regions to the national grid. Now, the major growth will come from states which are improving or should improve their energy access infrastructure.” The transmission industry estimates projects worth Rs 100 billion to come from states such as Uttar Pradesh and Jharkhand.
As for inorganic growth, Agarwal said there were few projects in the market and they would evaluate if required. “There are two types of projects in the market – Engineering, Procurement and Construction (EPC) players selling their projects and generating companies
which own transmission assets,” Agarwal said.
In January, Sterlite bought back a 28.4 per cent stake in Standard Chartered PE for Rs 10.10 billion. Sterlite now owns a 100 per cent stake in the business. It has 13 assets in India with 8,000 ckms of transmission lines commissioned or under construction. The company says it has 31 per cent market share by tariff of the projects it won through competitive bidding.