Essar gets nod to raise foreign equity

New Delhi: Essar Power Ltd’s proposal to infuse up to Rs 8,000 crore as foreign equity in the company for undertaking various “downstream projects”, including coal mining for captive consumption, has been cleared by the Government.

“The approval will allow Essar Power to invest in the permitted downstream activities, including investment in power sector and coal mining for captive consumption for power projects,” the Finance Minister, Mr P. Chidambaram, told reporters after a meeting of the Cabinet Committee on Economic Affairs (CCEA).

The Foreign Investment Promotion Board (FIPB) has cleared the proposal and since the investment inflows exceeded Rs 600 crore, according to Press Note 7 (1999 series) it needed a CCEA clearance.

According to the proposal, the foreign direct investment in Essar Power would be increased to 100 per cent with an estimated investment of Rs 8,000 crore as equity from Essar Power Holdings Ltd (EPHL), a foreign entity which is a part of the Essar Group and is incorporated in Mauritius.

Essar Global Ltd (EGL), a company incorporated in Cayman Islands, is the holding company of EPHL and also holds diverse investments in India and other countries.