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AES plans $2.8 Bn power plants
By siliconindia
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Thursday, 20 December 2007, 02:35 IST
New Delhi: U.S. power company, AES, plans to build power plants worth $2.8 billion in India. It is considered as the biggest move by a foreign company into the country?s electricity sector since the high-profile failure of Enron more than six years ago, reported the Business Standard.
The company is finalizing the land acquisition for a $1.4 billion coal-powered plant in Chattisgarh and will invest $400 million in the 1,200 MW project. The rest of the fund will be raised through loans.
The company is in discussions with the International Finance Corporation and ICICI, for financing.
AES also plans to expand its existing power plant in Orissa. The Orissa plant was opened in 1998 in a joint venture with the Orissa government. The Orissa plant showed a profit of about $36 million in 2005-06. Both the partners will invest about $400 million for the expansion of the project.
Conflict over land acquisition, the displacement of locals and the problem of pollution also thwart big industrial companies that want to set up in India. AES?s foray into India's power sector gives hope that not everything is lost, said Sanjeev Aggarwal, Managing Director AES India.
Industry reforms in recent years have yielded some progress. Measures taken include independent regulation of the electricity sector; separation of power generation, transmission and distribution into different businesses; and competitive bidding for projects and greater transparency to woo private-company investment.
AES generates the majority of its revenues from overseas operations in 28 countries. It has extensive operations in Latin American and Asia, including Pakistan, Indonesia and the Philippines.