Vedanta approves INR 444 crore equity investment in 691 MW of ‘captive’ renewable energy projects


Vedanta Group’s Board of Directors has approved sourcing of an aggregate 691 MW of renewable energy to power the Group’s aluminum, copper and oil & gas operations across India. The company will source 91 MW of hybrid renewable power (50 MW for aluminum operations, 16 MW for copper operations, and 25 MW for oil & gas operations) and 600 MW of solar power for aluminum operations.

Vedanta will form special-purpose vehicles (SPVs) with Serentica Renewables India (erstwhile Sterlite Power Technologies) to implement these renewable power projects for long-term power supply to its operations. [Serentica Renewables, a step-down unit of Vedanta promoter Anil Agarwal’s Volcan Investments.] Vedanta Ltd and its subsidiaries will own 26% of the equity in the respective SPVs, with the balance owned by Serentica Renewables India. 

“Vedanta and its subsidiaries will own 26% of the equity in the respective SPVs at a total investment of up to INR 132 crore for hybrid renewable power (INR 65 crore for aluminum, INR 22 crore for copper, and INR 45 crore for oil & gas) and INR 312 crore for solar power for aluminum,” stated the company.

The SPVs will build the RE projects on a ‘captive’ and ‘build-own-operate’ basis. The project will be funded on a 70:30 debt-to-equity basis.

Post-project commissioning, Vedanta’s consuming units will pay electricity tariffs to the respective SPV under long-term (25-year) power delivery agreements signed with them.

“Once this power supply comes online, it has the potential to prevent about 38 million tons of GHG emissions over the power delivery agreement term from entering the atmosphere,” said the company. 

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