BHEL plans to pick up minority stakes in generation projects where it gets equipment deals

Equity for business is emerging a favoured model in the power generation sector.

Companies, most without any experience in promoting power projects, are sweetening their pitch for contracts by offering to contribute equity stakes in upcoming projects.

BHEL plans to pick up minority stakes in generation projects where it gets equipment deals, PTC India plans for equity support in projects where the generated power will be traded by it and German firm Evonik proposes to take equity in projects if it gets the operations and maintenance mandate.

Power Finance Corporation, which has so far restricted itself to debt funding, also plans to invest up to 26 per cent equity in power generation projects.

For instance, Evonik Energy Services India, a wholly-owned subsidiary of German firm Evonik Energy Services GmbH, plans to have equity stakes in upcoming private power projects.

“We had decided to pick up equity stake in power plants where we would get the contract for doing O&M work. Our exposure would be in the form of minority equity and would signal our commitment to the project,” Evonik India's Managing Director, Dr J.T. Verghese, told Business Line.

State-run equipment major BHEL (Bharat Heavy Electricals Ltd) has committed up to 26 per cent equity participation in a bevy of thermal projects using supercritical sets in Tamil Nadu, Karnataka and Maharashtra and plans to follow the model in Gujarat and Madhya Pradesh.

more at:
http://www.thehindubusinessline.com/2010/05/17/stories/2010051752030100.htm