Sterlite Power inks pact to sell Arcoverde project

Sterlite Power on Wednesday said that it has signed the sale agreement for its first power transmission asset operating in Brazil - the Arcoverde Project.

The project is responsible for expanding the flow of renewable energy in the countryside region of Pernambuco, the company said.

According its statement, Sterlite Power has signed an sale agreement with Vinci Energia FIP IE (V2i Transmisso de Energia S.A.) of Arcoverde Transmissao de Energia SA, special purpose entity power transmission company and holder of the Arcoverde Project.

The project named Arcoverde was won by Sterlite Power in April 2017 and commissioned in May 2019, 28 months ahead of the deadline set by ANEEL (Brazilian Electricity Regulatory Agency).

For this transaction, V2i Transmissao de Energia S.A., funded by Vinci Energia FIP - IE will pay Sterlite Power the amount of USD 35.5 million (approximately Rs 251 crore; base date: October 31, 2019), subject to positive or negative adjustment, resulting, among others, of variation between net indebtedness and capital between the base date and the closing date, as well as other adjustments after closing , it added.

The conclusion and effectiveness of that transaction is subject to compliance with certain preceding conditions, such as the approval of ANEEL, among others, it said.

Pratik Agarwal, CEO of Sterlite Power, said: Through this transaction we monetise our first asset and thereby attract equity capital to reinvest in our portfolio of greenfield projects.

According to Rui Chammas, Sterlite Brazil CEO, the Arcoverde project was delivered 28 months ahead of schedule and is consistent with the company's business model - generating growth capital by attracting investments for its developed assets.

The construction of the Arcoverde project increased the flow of renewable energies to the Pernambuco region with the construction of 129 km of power transmission lines, the installation of a new substation (Arcoverde II) and the expansion of two other substations (Garanhuns II and Caets II) existing in the region.

The foreseen investment by ANEEL to the project was USD 41 million, its concession ends in 2047.