INDIA: NTPC relaxed from Rs 1,000 cr equity cap for all projects

The government on Thursday exempted NTPC Ltd from the Rs 1,000-crore investment cap in a joint venture or subsidiary set up to bid for power projects, a move that would help the top electricity producer to place competitive bids for the upcoming seven plants it is eyeing.

"We are extremely happy. This will help us in being competitive to a great extent," Company Chairman and Managing Director T Sankaralingam said.

The Cabinet Committee on Economic Affairs gave its nod to waive the ceiling for equity investment by NTPC to establish financial joint ventures and wholly-owned subsidiaries in India or abroad for participating in bidding called by state utilities and distribution licensees, an official spokesperson said.

The approval would facilitate participation of NTPC in bidding for the development of power projects initiated by government utilities and result in greater competition and establishment of more public sector power projects, the spokesperson said after the CCEA meeting.

Being a 'Navratna' company, NTPC's participation in any joint venture for bidding was restricted to Rs 1,000 crore. The company had been seeking a special exemption from the government, particularly to bid for setting up seven coal- based power plants in Maharashtra, Madhya Pradesh, Uttar Pradesh and Karnataka.

The company seeks to become a 50,000-MW company by 2012. It has a total installed capacity of 29,144 MW at present.

Earlier, the company had to wait for a Cabinet clearance for an over Rs 1,000-crore equity participation in a joint venture for participating in bids for a power project. The seven projects, totalling a capacity of more than 10,000 MW, require an investment of up to Rs 1,800 crore each.

Source: India Economic Times

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