Essar Power gets CCEA approval for 100 per cent FDI
09 May 2008
The cabinet committee on economic affairs (CCEA) has approved Essar Power Ltd's proposals for Rs8,000 crore foreign direct investment through Mauritius-based Essar Power Holdings for use in downstream projects.
Besides, the government has given its nod to the Ruia group company's downstream investment plans in permitted areas like power sector and coal mining for captive consumption for power projects.
The company plans to raise equity by issue of additional shares and by acquisition.
The proposal has already been cleared by the Foreign Investment Promotion Board (FIPB).
Essar Power's proposal was earlier deferred by the FIPB for want of further details. FIPB had also sought the comments of power and coal ministries on the proposed investment. These have been cleared subsequently.
The finance ministry has also examined the source of funding and shareholding pattern of the company.
Essar Power plans to bring foreign investment through Essar Power Holdings for equity investment in its proposed power projects across the country. The company, which is an unlisted company, proposes to transfer between 70 per cent and 100 per cent equity to EPH.
The company has lined up plans to invest over Rs20,000 crore in the power sector in the next couple of years, although EPH would provide funds only for the equity stake.