NER II project is planned to strengthen the power transmission network in the North Eastern states in India
India-based an infrastructure investment trust IndiGrid has agreed to acquire 100% equity stake in NER II Transmission from Sterlite Power for nearly INR46.25bn ($632m).
The stake will be bought from Sterlite Grid 4, a wholly owned subsidiary of Sterlite Power Transmission, one of the sponsors of IndiGrid.
Part of Inter-State Transmission Scheme network, NER-II was awarded on a build, own, operate, maintain basis with a contractual period of 35 years.
The project is planned to strengthen the power transmission network in the North Eastern states including Assam, Arunachal Pradesh and Tripura.
It has 11 elements that include two substation elements, four transmission line elements, one LILO element and four line bays.
IndiGrid stated: “The acquisition of aforesaid power transmission asset is in line with the IndiGrid investment strategy as provided in the Trust Deed with a focus to ensure stable distribution to unitholders by owning assets with long term contracts.”
NER-II is expected to provide a strong interconnection between northern and southern part of North Eastern Region in India.
The transaction is expected to be closed during fourth quarter of 2020-21, subject to unitholders’ approval, regulatory approvals, and other customary closing adjustments.
IndiGrid chief executive officer Harsh Shah was quoted by Press Trust of India as saying: “NER-II fits well with our strategy of focusing on operating assets with long term cash flows and minimal counterparty risk.
“This acquisition would be DPU (distribution per unit) accretive and augment our recent increase of DPU to Rs 12.40 per annum for a considerable period.”
In April last year, IndiGrid announced the acquisition of Gurgaon Palwal Transmission project (GPTL) from Sterlite Power in a deal valued at INR10.8bn ($140m).