Power Finance Corp to invest $470 million in Vedanta’s energy business

In a recent development, Vedanta has secured financial closure, enabling the company to accelerate the completion of its power projects. The London-based group plans to utilize the funds for its power plants in Chhattisgarh and Andhra Pradesh, with the goal of increasing its operating capacity to 4.8GW by FY27. This move comes as Vedanta has been striving to raise capital amidst concerns over its ability to repay debts and credit rating revisions.

Typically, Vedanta raises capital from international banks or by selling equity in group firms. The recent funding from Power Finance Corporation (PFC) suggests that Vedanta may be regaining the trust of large domestic lenders. The group’s focus on the energy generation business has been on the rise, with investments in renewable power projects to expand its portfolio.

Vedanta’s recent acquisition of Meenakshi Energy Ltd and Athena Power aligns with its strategy to meet captive power requirements for its businesses. The group’s power strategy is being closely watched amid an ongoing demerger proposal, which aims to create independent verticals to unlock value. The demerged entities will be allocated debt in proportion to their assets.

Power Finance Corporation, as India’s largest power-sector lender, has been actively funding various energy projects, including those in the conventional and renewable sectors. The company recently announced funding for airport projects and has struck loan agreements with several firms to support their energy transition efforts.

Overall, Vedanta’s recent financial closure marks a significant milestone in its power generation plans, signaling potential growth opportunities and strategic advancements in the energy sector. With increasing investor interest and support from lenders, the company is poised for further expansion and development in its power business.