Power Grid to Invest ₹40,000 Crore in the Middle East: Eyeing Business Expansion

State-run Power Grid Corporation of India is planning a substantial undersea interconnection project worth up to ₹40,000 crore with countries in the Middle East. This ambitious venture comes as the company grapples with a subdued June quarter, where revenues remained almost stagnant.

Chairman and Managing Director R K Tyagi anticipates a modest topline growth of 4-5% in the current fiscal year (FY25). To accelerate future growth, Power Grid is set to invest ₹18,000 crore this fiscal year. Tyagi explained that as transmission projects mature, earnings tend to decline, necessitating continuous new project commissioning to sustain revenue growth.

Expanding its horizons beyond neighboring countries, Power Grid is actively exploring interconnection possibilities with Middle Eastern nations. Oman, Saudi Arabia, and the UAE are currently in the spotlight for potential collaborations. The proposed undersea interconnection will involve a high-voltage direct current cable with a capacity of up to 2,500 MW, connecting a pulling station near Gujarat’s Bhuj to a similar facility on the Middle Eastern coast. This massive project is estimated to cost between ₹35,000 crore and ₹40,000 crore and is expected to take approximately six years to complete.

The company’s revenue growth was impacted by a lower capitalisation of commissioned projects in the June quarter. To rectify this, Power Grid aims to increase capitalisation to ₹18,000 crore in the current fiscal year. The company has already secured six out of ten transmission projects till July, with three projects alone contributing a levelized tariff of ₹4,172 crore in the June quarter.

While acknowledging challenges in the transformers segment, Tyagi emphasised the company’s proactive approach of pre-ordering critical equipment to ensure uninterrupted project execution. With a significant investment of ₹18,000 crore planned for the fiscal year, Power Grid expects revenue growth to accelerate. The majority of this investment will be directed towards core transmission lines, with a strong focus on renewable energy projects.

Beyond its core business, the company is diversifying into areas such as smart meters, data centers, solar power, and green hydrogen. Power Grid has already secured smart meter projects in Gujarat and operates a data centre in Manesar, with plans for expansion in Chennai, Bengaluru, and Hyderabad.

For the June quarter, the company reported a modest 3.52% increase in net profit to ₹3,723 crore, while revenues edged up to ₹11,279.59 crore from ₹11,257.60 crore in the previous year.

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