India Grid acquires two solar assets for Rs 660 cr

India Grid Trust on Wednesday announced the completion of acquisition of 100% stake in two solar assets with cumulative capacity of 100 MW from Fotowatio Renewable Ventures at an enterprise value of Rs 660 crore.

With this acquisition, the company's asset portfolio will now consist of fourteen diversified power projects consisting of 40 transmission lines,11 substations (13,550 MVA capacity) and 100 MW of solar power plants across 18 states and one Union Territory. IndiGrid's acquisition of its first solar asset is an important milestone in the Indian infrastructure sector as this marks the first renewable energy acquisition by any InvIT in the country.

The 100 MW assets are fully operational and located in high radiation zone in the 400 MW Ananthapuramu Solar Park in Andhra Pradesh with a contractual period of 25 years at a fixed tariff. The superior quality projects use tier I equipment and are eligible to receive a fixed tariff on per unit of electricity generated thus limiting the operational risk. The projects have been operational for over two years and have a robust track record of generation and collections since inception.

 

India Grid said that the transaction is in line with its strategy to acquire solar projects with long term power purchase agreements, operational track record and financially strong counterparties / off-takers such as SECI and NTPC. The acquisition will be funded through a combination of debt, internal accruals and recent rights issue. The net debt/AUM stands around 58% post this acquisition, providing adequate headroom for growth against the 70% leverage threshold as per SEBI InvIT Regulations

Commenting on the acquisition, Harsh Shah, CEO of IndiGrid said We are excited to diversify our portfolio and add the first set of solar assets. This acquisition is DPU accretive and would result in healthy addition to our net distributable cash flow. While power transmission assets remain at the core of IndiGrid's growth strategy, we believe such attractive opportunities to acquire good quality solar projects ties in well with our strategy of providing predictable cash flows to our investors and reinforces our commitment to be a socially responsible organization.

IndiGrid is the first Infrastructure Investment Trust (InvIT) in the Indian power sector. Units of India Grid Trust were up 0.72% at Rs 135.70 on BSE.

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