Vedanta bags ₹3,900 Crore 11-year loan funds from PFC

16 Apr 2024 , 11:35 AM

Mining conglomerate Vedanta Ltd has secured an 11-year term loan of ₹3,918 Crore from Power Finance Corporation Ltd (PFC), according to sources. The financial closure will allow Vedanta to accelerate the construction of its power projects.

The firm intends to boost the operational capacity of its power business in India to 4.8 GW by FY27, according to persons familiar with the situation. The fresh finance followed the Vedanta group’s acquisition of Meenakshi Energy Ltd on December 28 through an NCLT-driven bankruptcy procedure.

Meenakshi Energy operates a coal-fired power plant in Nellore, Andhra Pradesh, which Vedanta will utilise to deliver power to merchants.

Vedanta has bought two plants: Meenakshi Energy Ltd in Andhra Pradesh, with a capacity of 1 GW, and Athena Power in Chhattisgarh, with a capacity of 1.2 GW.

They stated that the monies will be used largely for these two critical power plants.

The finance is part of the group’s increased focus on expanding its energy portfolio in India, and the financial closure will allow the business to speed up the construction of the power projects.

PFC is India’s largest power-sector lender, providing funding to companies that hold potential power projects and produce power-sector equipment.

In August 2022, the London-based mining conglomerate paid ₹565 Crore for Athena Chhattisgarh Power Ltd to cover its captive power demand.

During the group’s continuing demerger, Vedanta’s power strategy has come into focus. Marquee investors, including BlackRock, the world’s largest asset manager, the Abu Dhabi Investment Authority (ADIA), and domestic mutual funds such as ICICI Mutual Fund, Nippon India Mutual Fund, and Mirae Mutual Fund, have all increased their holdings in the company, demonstrating its strong and stable financial position.

Serentica Renewables, a renewable power firm backed by Sterlite Power, said last month that it will invest ₹25,000 Crore to increase its project portfolio to over 4 GW by June 2025.

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