Power Grid plans Rs 40,000 cr subsea interconnection with Middle East in 5 years

Power Grid undersea: State-run Power Grid Corporation of India Ltd is planning a significant undersea interconnection project worth up to Rs 40,000 crore with countries in the Middle East, a top official announced on Monday.

After a lacklustre June quarter with nearly flat revenues, the company expects a modest topline growth of 4-5 per cent in FY25, according to Chairman and Managing Director RK Tyagi. He shared these insights with reporters following the company's earnings announcement on Friday.

Power Grid plans to invest Rs 18,000 crore this fiscal year to boost future growth. Tyagi explained that as projects age, their earnings decline, necessitating the commissioning of new projects to sustain revenue growth.

The company is looking beyond its immediate neighbours for interconnection projects and is in discussions with Oman, Saudi Arabia, and the UAE. Tyagi detailed plans for an undersea high voltage direct current cable with a capacity of up to 2,500 MW, extending from a polling station in Gujarat's Bhuj to a similar station on the Middle Eastern shore. The project, estimated to cost between Rs 35,000-40,000 crore, is expected to take up to six years to complete.

Tyagi attributed the recent revenue slowdown to the 'capitalisation' of project commissioning worth only Rs 2,300 crore during the quarter. However, the company aims to increase this figure to Rs 18,000 crore in the current fiscal year. Power Grid has secured six out of ten transmission projects by July, including three projects in the June quarter with a levelised tariff of Rs 4,172 crore.

Despite challenges with transformers, Tyagi assured that pre-ordering critical equipment ensures project timelines are maintained. He projected accelerated revenue growth, emphasising the target of over Rs 18,000 crore investment this fiscal year.

A substantial 80-85 per cent of this investment will focus on core transmission lines, with more than 80 per cent of new work related to renewable energy. Power Grid is also diversifying into smart meters, data centres, solar power capacities, and green hydrogen. The company has secured smart meter projects in Gujarat and operates a data centre in Manesar, with plans to expand capacity in Chennai, Bengaluru, and Hyderabad.

For the June quarter, Power Grid reported a 3.52 per cent increase in net profit, reaching Rs 3,723 crore, with revenues marginally rising to Rs 11,279.59 crore from Rs 11,257.60 crore in the same period last year.

On Monday, Power Grid's shares closed 0.55 per cent lower at Rs 342.40 apiece on the BSE, compared to a 0.03 per cent gain on the benchmark index.

(With PTI inputs)