Indian Government Raises Power Grid Subsidiary Equity Limit To Rs 7,500 Crore

The Indian government has approved an enhanced delegation to Power Grid under the extant guidelines dated 4th February, 2010, of the Department of Public Enterprises (DPE) on delegation of powers applicable to Maharatna CPSEs.

The Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, has approved this enhanced delegation to POWERGRID. 

Power Grid Corporation of India is owned by India’s Ministry of Power and primarily engaged in the transmission of bulk power across different states of India.

Gurugram-headquartered Power Grid transmits about 50% of India’s total power generated through its transmission network and covers 90% of the country’s interstate and inter-regional electric power transmission system.

The approval will enable Power Grid, the largest and most experienced transmission service provider in the country, to expand its investment in its core business and support the evacuation of renewable energy capacity, helping achieve the target of 500 GW from non-fossil-based sources.

The approval enhances the permissible equity investment limit of Power Grid 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% of the company’s net worth.

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

Additionally, it will broaden competition in the Tariff-Based Competitive Bidding (TBCB) process for selecting bidders for critical transmission projects. This ensures better price discovery and ultimately enables consumers to access affordable, clean energy.

As India enters the next phase ofits renewable energy transition, the focus is not only on adding capacity but also on ensuring it is absorbed efficiently through grid integration, storage deployment, market reforms and transmission. 

A key objective remains the optimisation of overall renewable energy costs and associated transmission infrastructure, to keep pace with renewable energy deployment.