The Hindu Business Line : FIPB clears AES plan for Chhattisgarh

Investment plans
Out of the total investment, the company intends to bring in $370 million as foreign direct investment (FDI) and the balance $852 million will be raised as loans from domestic and foreign banks and financial institutions.

New Delhi , Sept. 22

After an unsuccessful effort to set up a power plant in Orissa, the US-based AES Corporation is back with plans for Chhattisgarh.

The company proposes to set up a greenfield coal-based power generation plant in Chhattisgarh with an investment of $1.22 billion and also undertake coal mining for captive purpose.

Out of the total investment, the company intends to bring in $370 million as foreign direct investment (FDI) and the balance $852 million will be raised as loans from domestic and foreign banks and financial institutions, the company has informed the Government.

Initial nod from FIPB

The proposal has received initial clearance from the Foreign Investment Promotion Board (FIPB) despite AES's existing Indian joint venture partner, the Orissa Government's refusal to give a no objection certificate (NOC) to AES because of its failure to generate power in that State.

The proposal has now been sent to the Finance Minister and will finally be placed before the Cabinet Committee on Economic Affairs (CCEA) for approval, sources said.

AES holds 49 per cent stake in Orissa Power Generation Company (OPGC) while the Orissa Government holds 51 per cent.

The FIPB had, suo moto, obtained the opinion of the Orissa Government on AES' fresh proposal following which the State Government had conveyed that the company's "proposed investment in another State (Chhattisgarh) will adversely affect the existing arrangement and hence Government of Orissa is not agreeable to provide NOC for the proposal."

AES' Orissa plan was one of the seven fast track power projects that were cleared immediately after reforms in the power sector but the proposed plant did not come up.

The FIPB, however, did not find the Orissa Government's reasons to be "satisfactory" and went by AES' reasoning that the Chhattisgarh venture would not jeopardise the interests of the existing joint venture because they are in separate States and OPGC can sell power only to GRIDCO, the sources said.

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