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India’s Sterlite Power Does A First In Brazil, Secures 2 Projects; Total Investment $200 mn

by wireworld on 05/16/2017 - 04:08 pm

Tag: Projects

In what could be billed as a first major foray by any Indian power company in Brazil, Sterlite Power has secured two power transmission projects auctioned by Agência Nacional de Energia Elétrica, Brazil’s national power regulator. In this auction, the regulator awarded 31 power transmission projects across 19 states to evacuate 13,132 MVA of power over 7,400 km of new transmission lines that will unlock $4 billion of new investments.

Of the 31 Lots that were auctioned by the regulator, Sterlite Power won two projects — Lot 10 and Lot 15 — to setup 114.4 km 230 kv transmission line in the state of Rio Grande de Sul (Rio Grand of South), and a 145 km 230 kv line in the state of Pernambuco, respectively.

The total investment on the two projects is estimated at $200 million or Rs 1,350 crore and would be spent on assembly, operation and maintenance, and construction of these power transmission facilities. The projects have a concession period of 30 years.

Pratik Agarwal, CEO, Sterlite Power, told FE, Brazil has extensive need for projects. However, the challenge in Brazil gets magnified more than three times due to its geographic size. “In Brazil 60% projects are generally delayed but the government has shown the intent to improve this trend by inviting global tenders and investors like us,” Agarwal said.The company has already started the ground work of hiring the local team and plans to complete hiring of 20-30 people, including a regional head by August.

“We have also partnered with engineering procurement and construction players like GE, Incomisa, Angevix and Marte, who have started work on securing environmental, Right of Way and crossing clearances that normally take one-and-half years in Brazil,” Agarwal said. However, the laws are project friendly and even courts interfere only on compensation related issues,” Agarwal said.

Sterlite has bid at 58% discount to the bid price for the first project and 28% in the second, but believes the bids are not aggressive as the Brazil market like India is in for a healthy growth as it is coming out of recession.