Power Grid planning Rs 40,000 cr undersea interconnection with Middle East

State-run Power Grid is planning an undersea interconnection worth up to Rs 40,000 cr with countries in the Middle East, a top official said on Monday.

After the soft June quarter, which witnessed revenues being almost flat, the company sees the topline inching by only 4-5 per cent in FY25, its chairman and managing director R K Tyagi told reporters here after the earnings announcement on Friday.

The company plans to invest Rs 18,000 cr this fiscal year, which will help accelerate the growth rate going forward, Tyagi said, explaining that as projects become older, the earnings from transmission projects go down and the company has to keep commissioning new projects to have higher revenue growths.

On the interconnected projects front, it is looking at companies beyond the immediate neighbourhood and will be looking at countries in the Middle East, Tyagi said.

He specified that discussions are ongoing with Oman, Saudi Arabia and the UAE for the interconnection.

The company has a 'pulling station' near the Arabian Sea in Gujarat's Bhuj, which will be connected with a similar station on the shores of the Middle East country as well, he explained.

A high voltage direct current cable will go from the seabed with a capacity of up to 2,500 MW, he said, adding that it will cost Rs 35,000-40,000 cr and will take up to six years to complete.

Speaking about revenues, he said the topline growth suffered as it had a 'capitalization' of commissioning of projects worth only Rs 2,300 cr during the quarter, and added that it plans to take the number to up to Rs 18,000 cr in the current fiscal.

It has won six of the ten transmission projects till July, he said, adding that the bids for three projects were won in the June quarter alone had levelised tariff of Rs 4,172 cr.

Tyagi acknowledged that the company is facing challenges on the transformers front, but explained that it is pre-ordering the critical equipment before bagging a project which ensures that work does not suffer for want of components.

The revenue growth will accelerate from here on, Tyagi said, pointing to the target of investing over Rs 18,000 cr during the fiscal.

A bulk 80-85 per cent of the money will be spent on core transmission lines business, he said, adding that over 80 per cent of the new work is around renewable energy.

The company is diversifying into other areas as well, including smart meters, data centers, putting up solar power capacities and also green hydrogen, he said. It has won smart meter projects in Gujarat.

It already has a datacenter in Manesar and is mulling more capacity to come up at Chennai, Bengaluru and Hyderabad, he said.

For the June quarter, it had reported a 3.52 per cent increase in the net profit at Rs 3,723 cr and revenues inching up to Rs 11,279.59 cr, from Rs 11,257.60 cr in the year-ago period.

The Power Grid Corporation of India scrip closed 0.55 per cent down at Rs 342.40 a piece on the BSE on Monday, as against gains of 0.03 per cent on the benchmark.