Vedanta gets 11-year Rs 3,900-cr loan from PFC
The group plans to increase operating capacity of its power business in India to 4.8GW by FY27
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New Delhi: Mining conglomerate Vedanta Ltd has secured an 11-year term loan of Rs3,918 crore from Power Finance Corporation Ltd (PFC), sources said.
The financial closure will enable Vedanta to expedite completion of its power projects. The group plans to increase the operating capacity of its power business in India to 4.8 GW by FY27, sources with knowledge of the matter said.
The latest financing follows Vedanta group’s takeover of Meenakshi Energy Ltd on December 28 in an NCLT-driven insolvency process. Meenakshi Energy has a coal-based power plant at Nellore, Andhra Pradesh, which Vedanta will use to supply power to merchants.
Vedanta has acquired two plants -- Meenakshi Energy Ltd in Andhra Pradesh with a capacity of 1GW, and Athena Power in Chhattisgarh with a capacity of 1.2GW. It will primarily use the funds for these two of its key power plants, they said. The funding is part of the group’s renewed focus on growing its energy portfolio in India and the financial closure will enable the company to expedite the completion of the power projects.
PFC is India’s largest power-sector lender and typically extends financing to corporations that own promising power projects and manufacture power-sector equipment. In August 2022, the London-headquartered mining giant acquired Athena Chhattisgarh Power Ltd for Rs 565 crore to meet its captive power requirements.
Athena Chhattisgarh has a 1.2 GW coal-based power plant at Janjgir Champa district. Vedanta’s power strategy is in focus amid the group’s ongoing demerger. Marquee investors, including BlackRock, the world’s largest asset manager, as well as the Abu Dhabi Investment Authority (ADIA) and domestic mutual funds like ICICI Mutual Fund, Nippon India Mutual Fund and Mirae Mutual Fund have all increased their holdings in company which is proof to its strong and stable financial position. Vedanta has sharply increased focus on the energy generation business over the past two years.
