Hindustan Zinc to buy 26% stake in its renewable power supplier
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Indian zinc, lead and silver producer Hindustan Zinc Ltd (BOM:500188) said that it has signed a long-term power delivery agreement (PDA) with special purpose vehicle (SPV) Serentica Renewables India 4 Private Limited to secure 200 MW of renewable energy from captive plants.
The PDA signing comes as Hindustan Zinc prepares to acquire a 26% stake in Serentica for INR 3.5 billion (USD 43.9m/EUR 44.2m), having approved the transaction earlier this year.
Serentica was founded in February 2022 for the purpose of building captive renewable power plants in different parts of India and supplying the electricity to Hindustan Zinc under long-term PDAs. According to Indian business registers, the SPV is an affiliate of Sterlite Power Transmission Limited.
Sterlite Power and Hindustan Zinc are both part of India’s mining multinational Vedanta Group.
Hindustan Zinc said it would pay for the Serentica stake in cash. The remaining stake in the SPV will be held by “affiliated companies”. Serentica’s power project will be funded on a 70:30 debt to equity basis.
Serentica is expected to commission the power plants within 24 months of the PDA signing.
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