Standard Chartered PE to invest Rs500 crore in Sterlite Power Grid1 min read . Updated: 07 Jul 2014, 01:31 PM IST
The proceeds will be used for equity contribution in existing as well as new power transmission projects, says company
New Delhi: Standard Chartered Private Equity Advisory (India) Pvt Ltdwill invest ₹ 500 crore in Sterlite Technologies Ltd’s subsidiary, Sterlite Power Grid Ventures Ltd (SPGVL), the company announced on Monday.
This is the first foreign investment in the Indian transmission sector.
SPGVL is in the business of setting up and running electricity transmission projects. It is developing six transmission projects on build, own, operate and maintain (BOOM) basis.
“The proceeds will be used for equity contribution in existing as well as new power transmission projects. While there have been many foreign investments in the power generation sector, this would be the first foreign investment into India’s power transmission sector," the statement said.
“We look forward to a long-term partnership with Standard Chartered Private Equity in our Power Transmission Infrastructure Business. India’s energy sector focus remains on increasing generation capacity, but T&D (transmission and distribution) is clear bottlenecks due to which many parts of the country are energy surplus while others remain power-deficient," Pravin Agarwal, chairman, SPGVL and director Sterlite Technologies, said in the statement.
The Standard Chartered investment comes at a time when several projects have been delayed and there are concerns that the lacunas in the transmission sector may impede India’s efforts for economic growth.
In the last five years, while power generation capacity has grown by 50%, transmission capacity has only increased by 30%, according to a report by lobby group Federation of Indian Chambers of Commerce and Industry (Ficci) and consultancy firm Booz and Co. released in September last year.
The report added that the projected capacity addition of 88,000 megawatts (MW) in the 12th Plan period (2012-17) will require an addition of 90,000 circuit km (Ckm) of 765-220kV lines, 154,000 Megavolt ampere (MVA) of sub-station capacity and 27,350MW of national grid capacity.