It has already committed an investment of $1.7 billion in Brazil
Sterlite Power, a leading developer of transmission infrastructure, plans to invest $4 billion in Latin America as it looks to build a portfolio of international transmission projects.
The company has already committed to invest $1.7 billion in nine projects in Brazil, where it recently bagged six projects in an auction.
“We plan to make this investment in the next four years,” Group CEO Pratik Agarwal told Moneycontrol on the sidelines of a conference in Mumbai.
The six projects that the company got in June entail an investment of $1 billion.
“Brazil requires an incremental 61,800 km in transmission lines… this translates to an investment of $30 billion in the 10-year period up to 2026. Thus makes the market very attractive to us. We intend to develop global partnerships to execute our global portfolio of projects,” he added.
The commissioning of the nine projects will begin from June 2019, and will be completed by the middle of 2021. The company has got environmental clearance for the first project.
“The nine projects will give us an annual tariff of Rs 1,300 crore. And unlike in India, this tariff is linked to the local inflation. Effectively, the tariff will double in 12 years,” said Agarwal.
Working in Brazil
The company, which has set up a local unit in Brazil, will firm up financing of the projects through local institutions. About 20 percent of the investment will be funded through internal accruals.
The next round of auctions in Brazil will take place in December. “We will go after projects that have some order of complexity and create an impact, and provide higher returns,” said Agarwal.
He added that the company will take a call on keeping equity — or offloading some of it — in the projects depending on the market and opportunity.
“We went to Brazil because the regulatory framework and the demand-supply scenario there are similar to what we have in India… in the latest auction, we secured 65 percent of the capex entailed,” said the group CEO.
In India, Sterlite Power has 12 projects in its portfolio with a majority share in the market. The projects are spread over 21 states.
Over the next three years, the company expects to generate a tariff of Rs 2,300 crore from the Indian projects.
Overall, its projects cover 12,000 circuit km and 20,500 MVA in India and Brazil.Sterlite Power is also the sponsor of IndiGrid, the country's first infrastructure investment trust, or InvIT.