Power brakes on AES plan
This is one of the big-gest investments in the Indian power sector by an MNC in recent times but is yet to pass muster with the government.
By Shubham Mukherjee, TNN |
NEW DELHI: This is one of the big-gest investments in the Indian power sector by an MNC in recent times but is yet to pass muster with the government.
The government has put on hold a proposal by US-based power major AES Corporation to invest $1.2bn to set up a coal-based power and coal mining project in Chattisgarh.
According to sources, the proposal has been held up as an existing joint venture of AES in Orissa-OPGCL is yet to give a no-objection to the venture.
As per Press Note 1 (’05 series), a new subsidiary has to take a no-objection from its existing joint venture, before it can be accorded approval to set up shop in India. Sources say the firm has also sought waiver of the applicability of Press Note 1 condition in its present plan.
It wants to set up a 100% subsidiary of AES OPGC Holding, Mauritius, or any other group affiliate of AES Corporation, US. The coal mining venture would be for captive consumption. Of the total project cost of $1.2bn, it would get $370m as FDI and the $852m would be raised through loans.
It may be pointed out that AES Corporation, through group companies AES (India) and AES Mauritius, hold 49% in a power company in Orissa — OPGCL.
Because of this, it attracts the regulations of Press Note 1 of ’05 and Press Note 3 of ’05 series. Sources say the ministry of power has supported the plan subject to the comments of Department of Industrial Policy and Promotion over the Press Note 1 and 3 norms.
After deliberating on the issue, the Foreign Investment Promotion Board (FIPB) has directed that the views of the JV partner should be obtained before the proposal is cleared. “It should be considered in terms of guidelines notified by Press Note 1 (’05 series) after taking into consideration the views of both sides,” the FIPB has said.
AES set up a wholly owned subsidiary with investments of Rs 515 crore to develop power projects, provide services including operation and maintenance service, pre and post construction consultancy services, evaluation of project profitability and other allied management services.
It also worked for the fast track designated ib valley power project in Orissa for several year, before it was scrapped.
The government has put on hold a proposal by US-based power major AES Corporation to invest $1.2bn to set up a coal-based power and coal mining project in Chattisgarh.
According to sources, the proposal has been held up as an existing joint venture of AES in Orissa-OPGCL is yet to give a no-objection to the venture.
As per Press Note 1 (’05 series), a new subsidiary has to take a no-objection from its existing joint venture, before it can be accorded approval to set up shop in India. Sources say the firm has also sought waiver of the applicability of Press Note 1 condition in its present plan.
It wants to set up a 100% subsidiary of AES OPGC Holding, Mauritius, or any other group affiliate of AES Corporation, US. The coal mining venture would be for captive consumption. Of the total project cost of $1.2bn, it would get $370m as FDI and the $852m would be raised through loans.
It may be pointed out that AES Corporation, through group companies AES (India) and AES Mauritius, hold 49% in a power company in Orissa — OPGCL.
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Because of this, it attracts the regulations of Press Note 1 of ’05 and Press Note 3 of ’05 series. Sources say the ministry of power has supported the plan subject to the comments of Department of Industrial Policy and Promotion over the Press Note 1 and 3 norms.
After deliberating on the issue, the Foreign Investment Promotion Board (FIPB) has directed that the views of the JV partner should be obtained before the proposal is cleared. “It should be considered in terms of guidelines notified by Press Note 1 (’05 series) after taking into consideration the views of both sides,” the FIPB has said.
AES set up a wholly owned subsidiary with investments of Rs 515 crore to develop power projects, provide services including operation and maintenance service, pre and post construction consultancy services, evaluation of project profitability and other allied management services.
It also worked for the fast track designated ib valley power project in Orissa for several year, before it was scrapped.
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