UPDATE 1-India OKs AES unit, $370 mln FDI in power project http://today.reuters.com/news/articleinvesting.aspx?view=CN&storyID=2006-11-02T144714Z_01_DEL28649_RTRIDST_0_UTILITIES-INDIA-NTPC-UPDATE-1.XML&rpc=66&type=qcna Thu Nov 2, 2006
UPDATE 1-India OKs AES unit, $370 mln FDI in power project
NEW DELHI, Nov 2 (Reuters) - India on Thursday approved $370 million in foreign direct investment in a coal-fired power project in the mineral-rich state of Chhattisgarh to be funnelled through a local unit of U.S.-based AES Corp. (AES.N: Quote, Profile, Research).
"The cabinet committee today approved the setting up of a wholly-owned subsidiary of AES Corp. to undertake a greenfield coal-based power generation plant," Finance Minister Palaniappan Chidambaram told reporters. The project is expected to cost $1.22 billion, and the remaining $852 million will be raised through loans with domestic and international lenders.
The cabinet also decided that the state-run National Thermal Power Corp.'s 10-billion-rupee investment ceiling would be raised to enable the utility to bid for two large power projects.
However, total investment by NTPC (NTPC.BO: Quote, Profile, Research) should not exceed 30 percent of the company's net worth.
Energy-starved India faces a huge power shortfall in an economy that is growing at about 8 percent a year. It currently generates 125,000 megawatts of power and plans to increase that figure to 200,000 megawatts by 2012. ($1=44.83 rupee)
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