Adani Energy Solutions Limited (AESL) has formally secured long-term funding from a group of major Japanese banks. This investment capital is committed to the establishment of a flagship high-voltage direct current (HVDC) transmission project, which is planned to be a gigantic green evacuation corridor.
The project, according to the announcement of the company, will be significant in enhancing the flow of clean power throughout the northern parts of India, whereby renewable power produced in resource-abundant areas will be directed to the areas of high demand within the industrial and urban centres.
Development and funding round
Japanese banks MUFG Bank Ltd and Sumitomo Mitsui Banking Corporation (SMBC) have led the funding. The project itself belongs to the broader scheme of AESL to develop a strong and future-ready transmission backbone that can sustain the grandiose decarbonization goals of India.
This project entails the creation of a ±800 kV HVDC green energy corridor with a colossal evacuation power of 6,000 MW. This transmission link will be around 950 kilometres long and will link Bhadla (Rajasthan), which is one of the largest solar power centres in the world, as well as Fatehpur (Uttar Pradesh), which is an important industrial and transport centre. The corridor will have the potential to evacuate sufficient renewable energy to serve an estimated 60 million households once it is operational, which will significantly lower the amount of carbon footprint of the northern power grid.
The project will be commissioned in 2029 and is supposed to be an important artery in the national grid. It solves one of the main problems of the energy transition, the effective transport of electricity between remote generation locations and the energy-proficient areas, by enabling the mass-scale integration of solar and wind energy. The focus of AESL is to build infrastructure that will not only address the demands at present, but that can be expanded in the future to renewable capacity.
Integration and ESG commitment
The use of the latest HVDC technology is one of the highlights of this 6,000 MW project. AESL has also collaborated with Hitachi Energy to assist in the provision of the sophisticated technical systems needed in the high-capacity link. The project will be implemented in partnership with Bharat Heavy Electricals Limited (BHEL) in a move that is in tandem with the government’s move as part of its Make in India program. This collaboration guarantees that the international technological skills are combined with the local production abilities that result in the development of the local industry and the creation of the global infrastructure.
The venture is within the clean energy ecosystem of Adani Group. The state of Rajasthan is a current generation centre of Adani Green Energy Limited (AGEL), which produces power and supplies it to other subsidiaries, one of which is Adani Electricity Mumbai Limited (AEML). The new corridor will also increase the capability of the group to control the whole value chain, which includes generation and transmission to retail distribution, to ensure a consistent and reliable supply of the green molecules to the grid.
The funding was increased under the AESL sustainable debt formula, which follows the Equator Principles and international Environmental, Social and Governance (ESG) principles and regulations. The framework enables the participating lenders to categorise the facility as a Green Loan, which shows the direct role of the project in mitigating climate change. The international banking community (MMUFG and SMBC) is also willing to keep supporting the Adani Group, which proves that the world has continued to trust in the implementation capacity of the Adani Group and the policy framework on renewable energy in India.
To add more credence, AESL has recently been rated by Japan Credit Rating Agency (JCR) with a credit rating of BBB+ (Stable), which coincides with the sovereign rating of India. This investment-grade specification signifies how financially robust the company is and how capable of tapping into various sources of international capital at reasonable rates. According to Kandarp Patel, the CEO of AESL, this project is a landmark in the establishment of a sustainable energy system in the future that is being achieved by means of international cooperation.
Conclusion
The finalization of the Japanese funding of the 6,000 MW green energy corridor is a historic moment for Adani Energy Solutions and the power sector of India. The connection of the world-renowned solar-rich plains of Rajasthan with the industrial core of Uttar Pradesh through a 950 km HVDC connection is addressing an important element of the energy transition puzzle.
The high-technology improvements in the project, its compliance with the international environmental standards, and the support of the world-renowned financial institutions all create the indication of a stronger and more sustainable national grid. As the project is projected to reach its commissioning date in 2029, it will remain as a testament to the ability of cross-border partnerships to create a global shift towards clean energy.
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