Powergrid and ILFS enter into JV

Power Grid Corporation of India Ltd has informed that the Company entering into a Shareholder's Agreement with Infrastructure Leasing & Financial Services Ltd and POWERGRID for formation of Joint Venture Company named "POWERGRID IL&FS Transmission Pvt Ltd".

In this regard the Company has issued the following Press Release :

"State-run Power Grid Corporation of India Ltd, on January 11, 2008 entered into a Shareholder's Agreement with Infrastructure Leasing & Financial Services Ltd. The new Joint Venture Company named "POWERGRID IL&FS Transmission Pvt Ltd" has since been incorporated. Both, the Company and IL&FS will have 50% stake in the company. The main Objective of Company is to undertake activities of project development of intra transmission and sub-transmission works for State Power Utilities, under Public-Private-Partnership (PPP) route within India and abroad including Interconnection with neighboring countries subject to bilateral agreement between the countries.

Both Government of India and State Governments have embarked upon implementation of massive generation capacities to bridge the demand and supply gap. Till now, the State Transmission Utilities (STUs) /SEBs had to invest their own funds to develop transmission projects. In order to meet the huge resources requirements by the respective states in implementing the intra-state transmission network and bridge the resources constraints, Ministry of Power Government of India in line with Electricity Act, 2003 have opened up transmission sector for development through private sector participation and necessary guidelines have been issued.

The guidelines of MoP envisage the selection of private parties through a process of transparent methodology on the consideration of lowest transmission tariff, after doing necessary preparatory and development work for the transmission project before it is offered for private sector participation. This JV will facilitate project preparation and development work for STUs and will act as a Bid Process Coordinator (BPC) of STUs and manage the bidding process for selection of the private Implementing agencies. The Joint Venture Company also has objective to undertake transmission projects in the neighboring countries.

The Joint Venture Company Board in its 1st meeting held on January 11, 2008 have approved that the Company will broaden its scope of development of transmission projects in India and abroad including interconnection with neighboring countries."