The Hindu Business Line : Essar Power gets CCEA approval for Rs 8000-cr FDI

NEW DELHI: The government approved on Friday approved the proposal of Essar Power Ltd to infuse up to $2 billion (nearly Rs 8,000 crore) as foreign equity in the company for undertaking various downstream projects, including power and coal mining.

"The approval will allow the Essar Power to invest in the permitted downstream activities, including investment in power sector and coal mining for captive consumption for power projects," said the Finance Minister Mr P Chidambaram after a meeting of the Cabinet Committee on Economic Affairs (CCEA).

The Foreign Investment Promotion Board (FIPB) has already cleared the proposal. Since the investment inflows have exceeded Rs 600 crore, as per Press Note 7 (1999 series), the proposal needed to be cleared by CCEA.

The foreign direct investment in Essar Power would be increased to 100 per cent with an estimated investment of Rs 8,000 crore as equity from Essar Power Holdings Limited (EPHL), a foreign entity that is a part of the Essar Group and is incorporated in M auritius.

Essar Global Limited (EGL), a company incorporated in Cayman Islands is the holding company of EPHL and also holds diverse investments in India and other countries.

At present, EPL is the operating company of the Essar Group in the power sector. It owns and operates a 515 mw power plant at Hazira in Gujarat. The company has lined up plans to invest over Rs 20,000 crore in the power sector in the next couple of years , although EPH would provide funds only for the equity stake. Essar Power plans to increase its installed capacity to 6,000 MW by 2012, which include power plants of 1,200 MW each in Madhya Pradesh, Gujarat and Jharkhand. - PTI

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