Adani Energy Solutions Limited (AESL) on Monday said it has achieved financial closure for its $ 1 billion green high voltage direct current (HVDC) link project, that will increase renewable energy supply to Mumbai.
The 80-km multi-faceted project will offer a technological upgradation to the Mumbai city. The construction work for this link will begin in October 2023, AESL (erstwhile Adani Transmission Ltd) said in a statement.
"AESL has announced successful financial closure for its $ 1 billion Green HVDC link project, which will enable further 'greening' of the Mumbai Grid by supplying more renewable power to the city while supporting its rising electricity demand," it said.
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 and results in lower energy losses.
The link shall bulk inject an additional 1,000 MW of renewable power into the city, thus ensuring uninterrupted power supply in future. Adani Electricity Mumbai Ltd (AEML), being the largest electricity distribution company, has committed to increasing the share of renewable energy in the overall mix to 60 per cent by 2027.
"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. We would like to express our sincere appreciation to our banking partners for their continued support in completing the transaction smoothly and for their enduring faith and confidence in AESL," said Anil Sardana, MD, AESL.
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 platform Infrastructure Financing Framework (IFF) that funds various under-construction assets offers project access to funds that another project in the portfolio has paid back.
"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, Socit Gnrale, Standard Chartered Bank, Sumitomo Mitsui Banking Corporation and The Hong Kong Mortgage Corporation Limited," the company said.
Mumbai's electricity demand is expected to touch 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.
