ASSET-MONETISATION STRATEGY: A UNIQUE FINANCIAL ‘INNOVATION’

Back in 2017 we embarked on our journey to establish our unique “asset-monetisation strategy” by sponsoring IndiGrid - India’s first power transmission InvIT. Today, we have established the asset monetisation business model successfully both in India and Brazil. We have so far flipped 9 operational assets to IndiGrid with a total value of `12,307 Crore (US$ 1.67 Billion) in India. And in Brazil, we have successfully completed the sale of 3 assets worth US$ 150 Million from our portfolio to marquee developers and investors.

It was not a surprise to me when this year, our unique asset monetisation business model of creating India’s first power transmission Infrastructure Investment Trust (InvIT), IndiGrid became an IIM-Ahmedabad case study. This has the potential to become a role model for infra financing globally.

FACING THE NEW NORMAL

As humanity adapts to the new normal defined by the pandemic, electricity has become a critical lifeline for society and economy. Our core purpose to empower humanity by addressing the toughest challenges of energy delivery resonates with our stakeholders even more strongly today. Be it virtual working or remote learning or uninterrupted access to healthcare, none of this would be possible without access to reliable power. Moreover, the pandemic has urged all of us to act in a timely manner to avert a bigger crisis of climate change. Governments across the globe have accelerated the transition from fossil fuel to clean energy. I am of the firm view that a cleaner and greener energy future awaits humanity. However, there remains a two-fold challenge ahead of us.

Although access to uninterrupted electricity is taken for granted in many parts of the world, it might come as a shocker that nearly 25% of the global population, i.e., nearly 2 billion people, either lack or have partial access to electricity. However, servicing this demand from the existing generation portfolio will lead to burning of more fossil fuel. This will push us back in our fight to "limit the rise in global average temperature to well below 20 C". The way out lies in bringing more renewables into the fold and connecting them to the grid. In this new world, we at Sterlite Power are humbled to play a critical role by enabling access to reliable power with an increasing focus on integrating renewables to the grid.

STERLITE POWER: STRIDING TOWARDS A CLEANER TOMORROW

Advancing the carriage towards a green energy efficient future, Sterlite Power has an increasing focus on integrating renewable energy (RE) to the grid. It gives me immense pleasure that over the course of last year, we have been awarded some vital projects which will be connecting the national grid to clean and green energy. The Lakadia-Vadodara Transmission Project Ltd. (LVTPL) is part of India’s Green Energy Corridor (GEC) and will contribute to achieving the country’s renewable energy goals. The WRSS XIX & NERSS IX project will bring clean and green energy from solar, nuclear and hydro for people across the western and north-eastern region in India. Our NER-II Transmission project would help inject power generated from the gas-based power plant in the state of Tripura into the eastern grid; thus acting as a natural balancer for renewables to get added to the national grid. Making it to the Sterlite Power’s RE club, these projects join hands with the successfully completed Arcoverde project – the first project developed by us in Brazil, which integrated wind energy generated power to the Brazilian grid.

RESILIENCE: KEY TO THE NEW WORLD

The ‘post COVID era’ is going to be different. However, it is entirely upon us whether we view the current scenario as a crisis, or as an opportunity to remould our future for better. As mentioned earlier, it is important that governments around the world must focus on a sustainable, low-carbon world.

The power sector is making rapid transition towards renewables. While there is abundant renewable energy generation capacity being built across the globe at an accelerated pace, there is limited evacuation infrastructure being built in tandem. Development of this transmission infrastructure is crucial to achieve the renewable goals. Transmission will remain a resilient sector with continued interest from investors given its annuity like returns. Investment in transmission will create new jobs which is need of the hour.

FOCUSSING ON A SUSTAINABLE FUTURE WITH ESG

As a company dedicated towards building a greener future, sustainability is second nature to us. Since inception, we have been implementing various environmentally sustainable practices throughout our projects such as tree translocation. We use aerial technologies and adopt optimal route planning to minimise impact on forest and wildlife. Our innovation like vertical substation has allowed us to reduce our space footprint. We maintain high ground clearance and tower heights, along with use of tools like bird deflectors to promote co-existence with nature and wildlife. We also focus on working in collaboration with local communities by respecting their customs and traditions. Besides garnering critical support, our holistic stakeholder engagement results in unlocking synergies with the local communities and administration.

We are now embarking on a journey to have the best-in-class Environment Social and Governance (ESG) practices at Sterlite Power, because we believe sustainable development is the only way forward.

Once again, I take this opportunity to thank you for your trust, confidence and continued support. Together, we shall continue to move forward in this journey of “Empowering humanity by addressing the toughest challenges of energy delivery”.

Warm regards,

Pratik Agarwal,

Managing Director,
Sterlite Power