Sterlite Power’s Successful Refinancing of LVTPL Green Energy Corridor Project Signals Confidence in India’s Transmission Sector

In a significant development, Sterlite Power, a renowned power transmission developer and global products and services provider, has announced the successful refinancing of the Lakadia-Vadodara Transmission project loan. The project, which became fully operational in January 2023, has secured new financing from HDFC Bank, IIFCL, and Bank of Baroda, enabling the prepayment of the existing project loan amounting to approximately INR 1840 crores.

The refinancing marks a milestone achievement for Sterlite Power, as it secures a reduced interest rate of approximately 8.25% p.a.p.m, significantly enhancing the project’s financial viability. The overall tenure of the facility extends to approximately 18 years. Notably, this refinancing initiative sets a precedent as the first private sector inter-state power transmission asset to secure such favorable terms. It underscores the strong interest of financial institutions in supporting power transmission projects that offer stable, long-term cash flows.

Pratik Agarwal, Managing Director of Sterlite Power, expressed his satisfaction with this significant milestone, stating, “Refinancing our commissioned projects is in line with our efforts toward strategic reallocation of resources. Securing a better interest rate for the commissioned project further adds to our bottom line while delivering value to all stakeholders.”

The Lakadia-Vadodara Transmission project, known as LVTPL, plays a crucial role in India’s power transmission landscape. It connects the 765/400 kV substation at Lakadia to Vadodara through a 335 km long, 765 kV double-circuit transmission line. This transmission corridor comprises 812 towers spanning seven districts in Gujarat, making it one of the largest transmission assets built in India to date.

The successful refinancing of the LVTPL project reflects the growing confidence in India’s power transmission sector. It highlights the sector’s attractiveness to investors and financial institutions, driven by stable cash flows and the increasing focus on renewable energy integration into the grid. Sterlite Power’s accomplishment sets a benchmark for future projects in the sector, demonstrating the potential for private sector participation in India’s infrastructure development journey.