Indian mining company Vedanta said that its board has approved plans for the group to procure 580MW of renewable energy for powering its operations across India.
In this connection, the group has signed certain long-term power security agreements for renewable power for its subsidiaries Hindustan Zinc, Bharat Aluminum (Balco), and Vedanta Limited (Jharsuguda Aluminium Operations) through captive power projects.
The power projects will be developed through a dedicated special purpose vehicle (SPV) for each of the entities.
Vedanta said that it has entered into a 25-year power delivery agreement (PDA) with SPVs of Sterlite Power Technologies.
Sterlite Power Technologies and its affiliates are said to be establishing a 1.96GW hybrid‐based renewable energy capacity through a mix of solar, wind, and storage technologies. After the power supply comes online, it can potentially offload nearly 2.7 million tons of GHG emissions from polluting the atmosphere.
The projects will be constructed on group captive model and build own operate (BOO) basis and will be funded on 70:30 debt to equity basis, said Vedanta. The SPVs are expected to begin delivering the electricity within 24 months of signing the PDA.
Vedanta and its subsidiaries will hold a 26% stake in the respective SPVs at a total investment of up to INR8.5bn ($110m).
Vedanta chief safety officer and group CEO Sunil Duggal said: “This agreement is an important milestone in our journey towards becoming the ESG leader in the natural resources sector.
“The project is poised to become one of the largest Renewable Energy hybrid projects in India. It demonstrates the Group’s commitment to become one of the greenest natural resources companies in the world.”
The renewable energy procurement move is part of a series of steps Vedanta plans to take to achieve its goal of becoming net zero carbon by 2050 or sooner. The Indian group is aiming to use 2.5GW of round the clock (RTC) renewable energy for powering its operations by the end of this decade.
Vedanta said that it will introduce renewable energy to partly replace existing captive thermal power capacities for smelting and related operations, and meeting the power needs of capacity expansion at Vedanta Aluminium ‐ Jharsuguda, Hindustan Zinc, and Balco.
