Sterlite Grid successfully issued India’s 1st AAA (SO) rated Transmission Bonds

Sterlite Power Grid Ventures Ltd. (Sterlite Grid) has announced that it has  successfully closed Rs 925 Cr issuance of non convertible debentures for its subsidiary East North Interconnection Company (ENICL). The issue is rated AAA (SO) by CRISIL and India Ratings. IDFC, Kotak Mahindra Bank and DSP Blackrock subscribed to the issue on the day of the issuance.

“We have always had a vision to help create a public debt market for privately developed infrastructure projects. We believe this will relieve some of the pressure from the banking system and can create a new avenue for money supply towards infrastructure projects. Our ENICL transaction is a first step in this direction and will immediately reduce our borrowing cost” said Pratik Agarwal. Vice Chairman ‐ Sterlite Grid.

Inter‐state Transmission Projects like ENICL benefit from a stable revenue profile and assured off‐take under the transmission service agreement (TSA) for a period of 25‐35 years. They enjoy stability of cash flow as they get paid from a national pool, which is managed by the CTU (Central Transmission Utility). Owing to the predicable and long term  revenue stream, such assets are attractive investment opportunities for global pension funds and insurance companies.

This development comes soon after Sterlite Grid set a new benchmark by commissioning the Transmission Project for the Rajasthan Atomic Power Project ahead of schedule. Since the implementation of the Tariff Based Competitive Bidding regime, this is the first time a power transmission line has been commissioned ahead of schedule.