Adani Energy Solutions Ltd · NSE:ADANIENSOL
Adani Energy Solutions — Investor Presentation (March 2024)
54 slides from Adani Energy Solutions's investor presentation, March 2024
Slide 1: Adani Energy Solutions Limited Investor Presentation March 2024
Adani Energy Solutions Limited (Formerly known as Adani Transmission Limited) Investor Presentation March 2024
Slide 2: Contents
CONTENTS 04-07 Adani Portfolio 09-10 About AESL 12-16 Transmission 18-21 Distribution 23-26 Smart Metering 28-30 District Cooling 32-35 ESG Framework Investment Case and AESL - Board 37-38 and Management Team 40-52 Annexure
Slide 3: Adani Portfolio
adani Energy Solutions Adani Portfolio
Slide 4: Adani: A World Class Infrastructure & Utility Portfolio
Adani: A World Class Infrastructure & Utility Portfolio Infrastructure and Utility Primary Industry Flagship Emerging B2C Core Portfolio Materials, Metal & Incubator Energy & Utility Transport & Logistics Direct to Consumer Mining (56.3%) (63.2%) (72.6%) (73.2%) (65.9%) (100%) AGEL AESL APSEZ Cement
Slide 5: Adani Portfolio: Decades long track record of industry best growth
Adani Portfolio: Decades long track record of industry best growth with national footprint Secular growth with world leading efficiency National footprint with deep coverage Growth 3x 6 Growth 4x 6 EBITDA 70% 1,2 EBITDA 92% 1,4 AEL Growth 3x 6 Growth 1.4x 6 APSEZ Adani’s Core Infra. Platform – 320 M
Slide 6: Adani: Repeatable, robust & proven transformative model of investment
Adani: Repeatable, robust & proven transformative model of investment Phase Development Operations Post Operations Centre of Excellence Project Management & Assurance Group AIMSL* Policy - Strategy - Risk Origination Site Development Construction Operation Capital Mgmt Analysis & market Site acquisi
Slide 7: AESL: A platform well-positioned to leverage growth opportunities in energy domain
AESL: A platform well-positioned to leverage growth opportunities in energy domain RAB expansion through Execution Prowess Strategic Presence Asset Hardening in Discoms Transmission Network of Transmission - Presence in 15 states 8% CAGR growth in RAB in Mumbai Development 20,422 ckm(1) Distribution
Slide 8: About AESL
adani Energy Solutions Adani Energy Solutions Ltd. (formerly known as Adani Transmission Ltd.) adani Energy Solutions =i, Smart Metering About AESL
Slide 9: AESL: Holding Structure and Portfolio Overview
AESL: Holding Structure and Portfolio Overview GQG 6.8%(1) Adani Family 73.2% Public Shareholding 20.0% Transmission Distribution Smart Metering District Cooling 100% 100% 74.9%(2) 100% 100% 100% 100% Section 63 Section 62 AEML MUL Parallel License Letter of Award BOT Opportunities Fixed tariff(2) R
Slide 10: Transformational Journey with Robust Growth and Credit Discipline
Transformational Journey with Robust Growth and Credit Discipline EBITDA (Rs. Crs) 6,101 5,493 5,066 4,519 2,937 3,113 1,997 2,005 FY16 FY17 FY18# FY19 FY20 FY21 FY22 FY23 Transmission Distribution Net Debt to EBITDA(2) (x) Gross Fixed Assets(3) (Rs Crs) AESL is Investment grade rated since FY16 4.2
Slide 11: Transmission
lani Energy Solutions
Slide 12: Transmission Business
Transmission Business Transmission Section 63 Section 62 Key Characteristics (Fixed tariff1) (RAB Assets) Concession Life : 35 years 32 Transmission Assets 5 Transmission Assets Counterparty : Network pool (Centre and State) 8 Under-construction 1 Under-construction 24 Operating Assets 4 Operating A
Slide 13: Asset Portfolio – Presence Across the Country
Asset Portfolio – Presence Across the Country 17 ~20,422 ~54,661 States ckt km MVA (distinct states Transmission Transmission including smart metering business) Line Capacity No Operational Ckt Kms 20 OBTL 630 1 MEGPTCL 1,217 21 WRSS_XXIA 295 2 ATIL (3 lines) 3,834 22 LBTL 351 3 ATSCL 97 23 JKTL 37
Slide 14: Private Participants Opportunity of ~US$ 28 bn projects over 10-15 years
Private Participants Opportunity of ~US$ 28 bn projects over 10-15 years Attractive Industry Opportunity backed by strong policy support RE penetration & General Network Access to boost system strengthening – Mandatory competitive bidding introduced since 2006 (TBCB) Renewable Penetration General ne
Slide 15: Business Philosophy focusing on De-risking at every stage of project lifecycle
Business Philosophy focusing on De-risking at every stage of project lifecycle DE-RISKING AT EVERY STAGE Route Identification & Survey Project Execution − Complex projects experience: Completed HVDC project − Route alignment on topographic maps to optimize route & (~1000 kms) in a record time of 24
Slide 16: Project Management & Assurance Group (PMAG) - End to End Project Integration
Project Management & Assurance Group (PMAG) - End to End Project Integration Bidding, Site Scouting Project Development & Basic Engineering Execution Operations Concept Integrated Project Management Commissioning Strength: Team of 90 professionals having hands-on experience of 2,000+ man-years of co
Slide 17: Distribution
Adani Energy Solutions Limited Debt Presentation | February 2 0 2 0 Transmission Distribution 14
Slide 18: Distribution Business
Distribution Business Distribution Section 62 (RAB Assets) AEML MUL Parallel Licensing Key Characteristics (applied and proposed) Mumbai Mundra SEZ License period: 25-year and perpetual business 400 sq km license area 85 sq km license area • Mundra Subdistrict • Navi Mumbai & Thane Regulated Asset B
Slide 19: AEML Distribution: India's No. 1 power utility
AEML Distribution: India's No. 1 power utility, as per MoP, McKinsey, PFC (Scored 99.6/100) Largest Integrated utility in India’s Commercial Capital - Mumbai AEML – Key Milestones Since Acquisition RAB Addition (Rs Crs) Capitalised RAB (Rs Crs) About Mumbai 4,619 CAGR of 8% 8th Most Populous City in
Slide 20: MPSEZ Utilities Limited (MUL): Overview
MPSEZ Utilities Limited (MUL): Overview Mundra SEZ is strategically located with well developed supporting RAB(1,2) (Rs Cr) infrastructure serving as an attractive industrial hub 56%, – Electricity Distribution for Mundra SEZ area 44 RAB FY23 44%, Rs 80 Cr 35 – Catering primarily to commercial and i
Slide 21: Distribution and Parallel License Opportunity
Distribution and Parallel License Opportunity (1) – Power distribution is one of the largest consumer facing sectors in the country. 96.7% of ~270 mn households in India are connected to the grid and primarily owned and operated by state governments – AESL’s Distribution platform intends to position
Slide 22: Smart Metering
adani Energy Solutions Smart Metering
Slide 23: Smart Metering Business
Smart Metering Business Smart Metering Key Characteristics DBFOOT (Totex Model) Payment Security through Direct Capex + Opex Contract period: 10 Years debit facility Under Implementation Counterparty: Pool of over 84 million Enhanced energy efficiency and RE consumers integration 9 Contracts (21.1 M
Slide 24: Reforms in Discom sector: Advanced Smart Metering through RDSS scheme
Reforms in Discom sector: Advanced Smart Metering through RDSS scheme Government Initiatives Need for Smart Meters (nos of FY23) 1 Revamped Distribution Sector Scheme (RDSS): • Target of 250 Mn smart meters by 2026 • Outlay of ~Rs. 3 Tn (RDSS plan) with ~1 Tn GBS High AT&C ACS-ARR gap Billing Effici
Slide 25: Smart Metering Contractual Framework
Smart Metering Contractual Framework Flow of Revenue for Smart Meter SPV Contract For Advanced Metering Infrastructure Service Provider (AMISP) Payment of Electricity Bills Consumers Payment Gateway Agent Bank Month Months 0 120 Supply of Direct Debit Facility Implementation Period Operational Perio
Slide 26: Market Dynamics: Smart Metering Business
Market Dynamics: Smart Metering Business – 109 Mn Smart Meters awarded so far (LOA), and 6 Mn are at negotiation stage (L1) – Untapped market of – 135 Mn Smart meters Total Smart Meters Punjab Uttarakhand 655k Uttar Pradesh Rajasthan Assam Bihar 773K 2839k LoA awarded, Tender yet to 43.7% Madhya Pra
Slide 27: District Cooling
District Cooling 27 Picture source: GIFT City DC Plant
Slide 28: District Cooling Business – Snapshot
District Cooling Business – Snapshot The District Cooling System (DCS) produces chilled water in a central plant and distributes cooling capacity in the form of chilled water from the central plant to multiple buildings through a network of underground pipes for use in space and process cooling. 1 A
Slide 29: District Cooling Business - a centralized, energy-efficient and low carbon cooling solution
District Cooling Business - a centralized, energy-efficient and low carbon cooling solution to drive sustainability in cooling sector BUSINESS RATIONALE TRADITIONAL VS DISTRICT COOLING − Opportunity to unlock potential in nation-wide Infrastructure Large Addressable Market and (airports, data centers
Slide 30: Four key segments to drive India's DCS demand
Four key segments to drive India’s DCS demand Cumulative Cooling Demand from key segments by FY30(1) (in Mn TR) Commercial Real To experience growth from 0.6 bn sqft (2019) 16% 84% 44.04 Estate to 1 bn sqft (2030) Global industrial cooling market, expected to 2.66 Industrial Cooling 20% 80% reach ~$
Slide 31: ESG Framework
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Slide 32: Assurance backed ESG framework
Assurance backed ESG framework Guiding principles IFC E&S United Nations UN Sustainable India Business & Biodiversity SLB Performance Global Compact Development Goals Initiative (IBBI) Principles Standards Guiding Policies principle Disclosure Standards TCFD TNFD GRI Standards CDP disclosure BRSR GH
Slide 33: Transforming through Green Energy Adoption
Transforming through Green Energy Adoption − AESL's pledge to ‘Net Zero by 2050’ to limiting the global temperature rise to 1.5°C with no or limited temperature overshoot. − With interim ABSOLUTE GHG emissions targets: • Reduce 72.7% Scope (1 + 2) by FY 2032 • Reduce 27.5% Scope 3 by FY 2031 − Green
Slide 34: ESG Commitments & Targets
ESG Commitments & Targets ESG Commitments − To be in Top 10 companies of the world in ESG benchmarking of electric utility sector by FY25 − To purchase RE power at AEML 60% by FY27 (committed under SLB framework) & 70% RE sources by FY2030 − To reduce Emission intensity [tCO2e/ EBITA] @ AEML by 40%
Slide 35: ESG Ratings, Awards and Recognition
ESG Ratings, Awards and Recognition ESG Commitments ESG Ratings AESL’s Rating Ranking of 86%, with consistent ranking above Electric & Gas Utilities industry average [911 companies] ESG Risk Rating of ‘Medium Risk’ with a score of 25.3 in February 2024 (improved from High Risk - 32.8 in April 2023),
Slide 36: Investment Case and Board & Management
Investment Case and Board & Management 36
Slide 37: AESL: Compelling Investment Case
AESL: Compelling Investment Case − Evolved and stable regulatory regime has enabled growth of AESL’s business into multiple segments (Transmission, Favorable Industry Distribution, Smart metering, District cooling) within energy domain Landscape − Focus on Grid reliability, consumerism and shift to
Slide 38: AESL: Board and Management Team
AESL: Board and Management Team Managing Strong Sponsorship Independent Directors Director Mr. Gautam S. Adani Mr. Rajesh S. Adani Mr. Anil Sardana Mr. K. Jairaj Dr. Ravindra H. Mrs. Meera Shankar Ms. Lisa MacCallum (Chairman) (Director) (MD, AESL) Dholakia Skilled and Experienced Management Team Mr
Slide 39: Annexures
Annexures 40-43 ESG Initiatives 44-46 Regulatory Framework 47 AEML – Case Study 48 Smart Metering – Key Benefits 49-52 Project Level Details – Asset Portfolio 39
Slide 40: AESL: Key Environmental Indicators and Milestones
AESL: Key Environmental Indicators and Milestones Key Performance Indicators Current Status Baseline Medium to Long-term Targets Energy Mix & Emission Intensity AEML has achieved 35% renewable in power mix as of 30% by 2023 - RE share in power procurement 3% FY19 60% by FY27 December 2023 (achieved
Slide 41: AESL: Key Social Indicators and Milestones
AESL: Key Social Indicators and Milestones Target Material Categories Material Themes Key Performance Indicators Baseline (FY23-24) Zero Rate of fatalities per million hours worked Zero (FY 20-21) Work related injury Rate of recordable work-related injuries per million man-hours 0.33 Zero worked (FY
Slide 42: AESL: Key Governance Indicators and Milestones
AESL: Key Governance Indicators and Milestones Material Categories Material Themes Key Performance Indicators Baseline Actions Taken and Goals 16.6% - women Board Gender Balance the board composition in terms of men • % of women directors in board improved to Board Gender Diversity directors in boar
Slide 43: AESL: Enhanced Safety Culture
AESL: Enhanced Safety Culture Safety Initiatives During Q3FY24 Safety Performance in Q3FY24 • Safety training: 47,683 man-hours of safety training and awareness during Q3 FY24 Transmission Distribution (AEML) • Positive Safety Culture: Safety Parameters Q3FY24 Q3FY23 Q3FY24 Q3FY23 o Monthly Safety Q
Slide 44: Stable Regulatory Framework
Stable Regulatory Framework The Electricity Act 2003 RAB Based Transmission and Distribution Assets Fixed Tariff Transmission Assets Section 62 - RAB Assets - Multi Year (5 yr) Tariff Section 63 – Fixed Tariff Method – License Period Basis Services Costs (Pass- O&M Expenses Power Procurement All oth
Slide 45: Payment Pooling Mechanism Reduces Counterparty Risk
Payment Pooling Mechanism Reduces Counterparty Risk Regulatory landscape CERC and SERC established & predictable in maintaining and defining tariffs • CERC, MERC and other ERCs have a Long-Standing History • CERC and state regulatory body (e.g., MERC, RERC) MYT Determination of Maintaining and Defin
Slide 46: AEML: Operating in a stable and evolved regulatory framework
AEML: Operating in a stable and evolved regulatory framework with predictable & robust returns Tariff is based on assured return on capital model + pass-through of costs + efficiency linked incentives Incorporated in 1999, MERC is the Normative costs Assured return on Efficiency linked Regular True
Slide 47: AEML Case Study: Successful Acquisition and Turnaround
AEML Case Study: Successful Acquisition and Turnaround ✓ Uptick in regulated capex (INR cr) RAB (INR cr) – Low capex pre-acquisition on account of liquidity constraints Post-acquisition Projection – Investment in capex resulting in asset hardening → supply Pre-acquisition 1,449 7,547 7,978 1,409 1,2
Slide 48: Smart Metering – Key Benefits
Smart Metering – Key Benefits Technology transformation Real time information Two-way communication Key technology towards the Measures electricity consumption & Between the meter and the power utility through transformation of power sector in India communicates the consumption reading to the cellul
Slide 49: AESL's Operational Asset Portfolio as of Dec 2023 (1/2)
AESL’s Operational Asset Portfolio as of Dec 2023 (1/2) Adani Energy Solutions Limited 100% 100% 75% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% ATSCL & WTGL, PPP Bikaner ATIL MEGPTCL AEML MUL ATBSPL ATRL RRWTL CWRTL FBTL GTL APTL STL Khetri Discom Discom MTSCL WTPL 8/9/10 Mundr
Slide 50: AESL's Operational Asset Portfolio as of Dec 2023 (2/2)
AESL’s Operational Asset Portfolio as of Dec 2023 (2/2) Adani Energy Solutions Limited 100% 100% 100% 100% 100% 100% 100% Obra-C Lakadia WRSS – XXI Jam Karur Kharghar Khambaliya WKTL Transmission - Vikhroli Badaun Banaskantha (A) Obra Lakadia Lakadia - Jam Warora Karur Kharghar Banaskantha Bhuj Kham
Slide 51: AESL's Transmission Under-construction Asset Portfolio as of Dec 2023
AESL‘s Transmission Under-construction Asset Portfolio as of Dec 2023 Adani Energy Solutions Limited Since AESL’s evolution its Transmission Network 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% (ckms) has grown 3.5x and expanded into Distribution MP AEMIL Khavda- Khavda – businesses NKTL WR-SR
Slide 52: AESL's Smart Metering Under-construction Portfolio as of Dec 2023
AESL‘s Smart Metering Under-construction Portfolio as of Dec 2023 Adani Energy Solutions Limited 100% 100% 100% 100% 100% 100% 100% 100% 100% APEPDCL – APCPDCL – APSPDCL – MSEDCL MSEDCL BEST APDCL NBPDCL UPCL Phase 1 & 2 Phase 1 & 2 Phase 1 & 2 NSC-05 NSC-06 BEST Smart NE Smart Adani Adani Adani Ada
Slide 53: Legal Disclaimer
Legal Disclaimer The information contained in this presentation is provided by Adani Energy Solutions Limited (together with its subsidiaries, the “Company” or “AESL”) to you solely for your reference and for information purposes only. This presentation is highly confidential and is being given sole
Slide 54: Thank You
MUSHKILON KI adani 4 NAHI SUNTE, HUM KARKE DIKHATE HAIN, #HumKarkeDikhateHain @ adani Energy Solutions Thank You
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