FIPB to consider Rs 547 cr FDI proposal of Teesta Urja

The Foreign Investment Promotion Board (FIPB) will consider tomorrow the Rs 547.2 crore FDI proposal of Teesta Urja, a special purpose vehicle incorporated to develop the 1,200 Mw Teesta hydro-power project in Sikkim.     

The company plans to raise Rs 547.2 crore of FDI by issuing partly paid up equity shares and converting some of them to fully paid up shares, sources said.      

Last month, FIPB had deferred the proposal after the Revenue Department sought more time to examine the sources of funds, they added.     

The company is seeking approval for issuing 54 crore partly paid shares to the foreign investor and ratification of conversion of 20 crore partly paid shares to fully paid-up shares.     

It is also seeking approval to call money on balance Rs 34 crore partly paid shares as per fund requirement of the project on or before second quarter of next financial year (2011-12), which is the likely commission of the first unit of the project.     

The major partners of Teesta Urja, apart from government of Sikkim, are recognized entities such as PTC India and Asian Genco Private.

As per the current FDI policy, foreign investment upto 100 per cent in the "projects relating to electricity generation, transmission and distribution, other than atomic reactor power" is permitted under the automatic route.     

The issue of partly paid equity shares to the foreign investor requires approval of Foreign Investment Promotion Board. In the past, FIPB has allowed issuance of partly paid shares subject to conversion to fully paid up within 18 months.