Cabinet clears higher equity limit for Powergrid to boost transmission push

Cabinet raises Powergrid's equity investment limit to Rs 7,500 crore per subsidiary, enabling greater participation in capital-intensive transmission projects and aiding renewable energy evacuation

The Cabinet Committee on Economic Affairs on Tuesday approved an enhanced permissible equity investment limit for Powergrid Corporation from the current threshold of Rs 5,000 crore per subsidiary to Rs 7,500 crore per subsidiary, while retaining the existing cap of 15 per cent of the company's net worth. 

The approval will enable the company, the largest transmission service provider, to expand its investment in its core business and support the evacuation of renewable energy capacity. It will help achieve the target of 500 GW from non-fossil-based sources, the government said in a statement. 

Additionally, Powergrid can now participate in bids for capital-intensive transmission projects, such as Ultra High Voltage Alternating Current (UHVAC) and High Voltage Direct Current (HVDC) transmission networks. 

 

The government said the move will broaden competition in the tariff-based competitive bidding (TBCB) for selection of bidders for critical transmission projects. It will ensure better price discovery and ultimately lead to the availability of affordable and clean energy for consumers.

 

The approval has been made under the extant guidelines released on 4 February 2010 by the Department of Public Enterprises (DPE) on delegation of powers applicable to Maharatna CPSEs.