Sterlite Power to invest $4 bn in power projects in Brazil

Sterlite Power, which won orders to build power transmission lines in Brazil last year, is mulling an investment worth $4 billion in energy projects in Brazil by 2022.

Looking for better returns and a wide range of opportunities for investments in Brazil, Sterlite Power’s is looking forward to grow rapidly in the country. It is looking to establish its headquarters in Sao Paulo as a base for future expansion. “We have already committed $1 billion (in projects), and we are open to expanding this three to four times over the next three or four years,” Sterlite Group CEO (chief executive officer) Pratik Agarwal said in a statement.

Agarwal further added that Sterlite has formed a local team and is currently looking for an experienced executive to take charge of Brazilian operations and lead the company’s expansion in the short to medium-term. “Sao Paulo will be our headquarters in Latin America. It will serve as our base to look beyond Brazil,” Agarwal said. He cited Argentina, Chile, Mexico and possibly Peru as potential countries of interest. He pointed out that the company is most likely to advance in to these markets in the next one to three years.

The executive also pointed out that in addition to participating in government auctions for new projects, Sterlite will also evaluate potential acquisitions as part of its growth strategy in the country. Sterlite Power while making new investments prefers to go for “complex” projects.

The company focuses on evaluating whether it would be able to generate more value from projects and have advantages over competitors. Sterlite caught the attention of the Brazilian energy industry in its first bid in April last year when it managed to take out a broadcast concession with a discount of 58.9 per cent over and above the government’s maximum allowable revenue for the project. The firm also bagged one more project at the same event and a third at another auction in December. The construction of these projects will require about $1 billion.

According to Agarwal, the strategy of the company is to have a good return even after provisioning for discounts. It aims to do this by leveraging technology extensively, judicious planning of works and anticipation of delivery of the lines to generate additional revenues. The company has already secured funding and necessary environmental licenses for one of its three projects. The company is confident that it will be able to complete and deliver these projects in advance, well ahead of the deadline.

“We have an excellent track record of delivering projects ahead of schedule and using some innovative strategies,”