Shares of Adani Energy Solutions Limited (AESL), formerly known as Adani Transmission, surged nearly 6% in intraday trade on Monday after the power distribution company said it has achieved financial closure for its $1 billion green high voltage direct current (HVDC) link project. The HVDC transmission link will enable further ‘greening’ of the Mumbai Grid by supplying more renewable power to the city, while supporting its rising electricity demand, the company says in an exchange filing today.
Boosted by the development, AESL share price gained as much as 5.7% to hit an intraday high of ₹841.05, while the market capitalisation climbed to ₹93,775 crore. Early today, AESL shares opened marginally higher at ₹797 against Friday’s closing level of ₹795.70 on the BSE.
At the current price level, AESL stocks trade 80% lower than its 52-week high of ₹4,238.55 touched on September 16, 2022. The power heavyweight touched its 52-week low of ₹630 on March 1, 2023, after a report by American short-seller Hindenburg Research rattled Adani group stocks.
In the last one year, AESL stock has fallen 75%, while it has lost 67% in the calendar year 2023. In the past six months, the counter has tumbled 33%, while it has risen nearly 12% in a month after it received approval from its board to raise funds through qualified institutional placements.
AESL informs exchanges that it has achieved $700 million financial closure with nine international banks for its under-construction HVDC transmission link between Kudus to Aarey, Mumbai, Maharashtra. The project is in line with AESL’s commitment to increase the share of renewable power in the overall mix to 60% by 2027, while it has already achieved its first major target of 30%, it says.
“The credit facility is part of the $700 million revolving project finance facility tied up in October 2021 for its under-construction transmission assets portfolio,” the power distribution company says.
As per the release, the banking consortium for the HVDC transmission platform comprised nine international banks including 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.
The 80 km multi-faceted project will offer a technological upgradation to the city, while managing all the complexities in developing such a largescale project in a city like Mumbai. The construction work for this link will begin in October 2023, the release notes.
The facility is certified as “Green Loan” by Sustainalytics, and will support the transmission of clean energy and advance the UN Sustainable Development Goal (SDG) 7 (Ensure universal access to affordable, reliable and modern energy services, increase substantially the share of renewable energy in the global energy mix) & SDG 9 (develop quality, reliable, sustainable and resilient infrastructure, including regional and transborder infrastructure, to support economic development and human well-being, with a focus on affordable and equitable access for all).
As per the company, Mumbai’s electricity demand is expected to touch 5,000 MW by FY25 from the current peak demand of 4,000 MW. The island city has only 1,800 MW of embedded generation capacity and the existing transmission corridors face capacity constraint risks. On October 12, 2020, the entire city witnessed a major power blackout event due to grid constraints. The HVDC transmission link will enhance grid stability by providing an interface with the state and national grids. The link will bulk inject an additional 1,000 MW of renewable power into the city, ensuring uninterrupted power supply in future.
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