FIPB okays Enron proposal

Though Enron would hold 100 per cent stake in the second phase initially, Maharashtra State Electricity Board (MSEB) would have an option to pick up 30 per cent in the project.

The second phase of Dabhol, which received the clearance from the finance ministry to raise money through the ECB route, is expected to achieve financial closure by March this year. Domestic financial institutions and banks like ICICI, IDBI, IFCI, and State Bank of India (SBI) have already committed to stand guarantee to Enron for raising money from abroad. Enron plans to raise about Rs 2,800 crore loan from foreign market for part financing its second phaseproject. The 740 mw first phase of the Dabhol project is likely to be commissioned soon, the sources said adding construction for the second phase would start after the financial closure is achieved.

The $ 1.2 billion Dabhol power project would have a total capacity of 2,184 mw based on liquified natural gas. Enron has also entered into a joint venture agreement with Japanese engineering giant Mitsui and state-owned Shipping Corporation of India (SCI) to bring the required 1.2 million tonnes of LNG per annum for the plant. Meanwhile, the FIPB also cleared a proposal of British Gas Pvt Ltd to increase equity capital in its holding company for investing in energy, gas and power sectors in the country.

British Gas would increase equity capital in the holding company from $2 million to $100 million (about Rs 411.6 crore), the sources said. Among 38 FDI proposals cleared today, one was by Virdian group of Ireland to set up a holding company to invest in the power sector. Virdian would bring in FDI worth Rs22.5 crore.

The Irish company has also been allowed to pick up 25 per cent in a power distribution company in Orissa, if the company is successful in its bid. The board also cleared the proposal of Allianz-Alpic Finance to start NBFC (non-banking finance company) activities in the country. German company Allianz will hold 51 per cent stake in the NBFC by bringing in Rs 5.1 crore as FDI. The remaining 49 per cent would be held by the Indian partner Alpic, sources said.

Electronics giant Matsushita (National Panasonic) has been allowed to bring in additional capital in its wholly-owned subsidiary in India. As per the proposal, the equity capital of the Indian subsidiary of the Japanese company will increase from $15 million to $20 million. The board cleared seven FDI proposals in electronics sector, including one by Capital Solution Pvt Ltd to set up a 100 per cent owned company to develop software by investing Rs 10 crore.

The sources said out of the seven, six proposals were to set up wholly-ownedsubsidiaries.

Among other proposals cleared were that of Cambata Aviation for a joint venture and Goan Real Estate and Construction Ltd.

In Cambata Aviation, Swiss Port International would pick up 51 per cent by bringing in Rs 15 crore and in Goan Real Estate, an overseas corporate body (OCB) would invest Rs 1.5 crore to pick up seven per cent stake, the sources said.