Adani Energy Solutions Limited (AESL) announced on Monday that it has successfully achieved financial closure for its USD 1 billion green high voltage direct current (HVDC) link project, aimed at boosting the supply of renewable energy to Mumbai.
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Adani Energy Solutions Limited (AESL) announced on Monday that it has successfully achieved financial closure for its USD 1 billion green high voltage direct current (HVDC) link project, aimed at boosting the supply of renewable energy to Mumbai.
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The 80-kilometer project is a multi-faceted endeavor that will bring technological advancement to the city of Mumbai. Construction is slated to commence in October 2023, according to a statement released by AESL (formerly known as Adani Transmission Ltd).
The HVDC link project is set to inject an additional 1,000 MW of renewable power into the city, ensuring a steady electricity supply in the future. Adani Electricity Mumbai Ltd (AEML), the largest electricity distribution company in the city, has committed to increasing the share of renewable energy in its overall energy mix to 60 percent by 2027.
This HVDC technology is superior to traditional methods as it enhances the stability of power distribution networks, minimizing synchronization issues and cascading failures that may arise from sudden load changes or blackouts. It's particularly well-suited for islands and regions using submarine cables for power supply procurement, resulting in lower energy losses.
"The project will accelerate the city's decarbonization efforts and its journey towards achieving net zero emissions. We extend our sincere appreciation to our banking partners for their continued support, facilitating a smooth transaction and demonstrating their unwavering faith and confidence in AESL," commented Anil Sardana, Managing Director of AESL.
The credit facility for the project is a part of the USD 700 million revolving project finance facility arranged in October 2021 for AESL's portfolio of under-construction transmission assets. This financing platform, known as the Infrastructure Financing Framework (IFF), provides funds to new projects based on the repayment of previous projects within the portfolio.
The consortium of international banks involved in the platform infrastructure financing framework includes 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.
With Mumbai's electricity demand projected to reach 5,000 MW by FY25, up from the current peak demand of 4,000 MW, the HVDC transmission link is crucial to ensuring grid stability and preventing constraints. The link will provide a vital interface between the state and national grids, enhancing overall energy reliability for the city.
On October 12, 2020, Mumbai experienced a significant power blackout event due to grid constraints, highlighting the need for improved transmission infrastructure. The green HVDC link project aims to address these challenges and contribute to a brighter and greener future for Mumbai. (With inputs from PTI)
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