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CCEA approves Rs 6,500 crore FDI proposals of two power units

08 Dec 2011 Evaluate

At a time when domestic investors are applying the brakes on power sector funding, foreign direct investment (FDI) inflows into the sector could actually be headed for a new record this fiscal. The Cabinet Committee on Economic Affairs (CCEA) has approved the proposals of two power entities for getting in FDI worth Rs 6,500 crore.

The government gave the green signal to Grid Equipment for bringing in FDI to the tune of Rs 4,500 crore. Further, Energy Grid Automation Transformers and Switchgears India's proposal for Rs 2,000 crore FDI too has been approved.

These proposals are for ‘downstream investment’ and transfer of entire equity shares of Grid Equipment and Energy Grid from Areva T&D India and other resident shareholders. Equity shares of the two entities - Grid Equipment and Energy Grid - would be transferred to ‘Alstom Grid Finance and other foreign collaborators and their nominees.’

Alstom, India is mainly into power generation equipment while Areva T&D India is a leading transmission and distribution player. The global business of Areva T&D were acquired by consortium of Alstom and Schneider Electric in June 2010.

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