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Business News/ Companies / News/  CLP India’s North East power link buy plan awaits MHA nod
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CLP India’s North East power link buy plan awaits MHA nod

Scrutiny is tight as India has made norms for clearances given to power transmission projects stringent

CLP India has invested ₹14,500 crore so far in the country and has a power project portfolio of 3GW (Bloomberg)Premium
CLP India has invested 14,500 crore so far in the country and has a power project portfolio of 3GW (Bloomberg)

The plan of Hong Kong-based CLP Group’s India arm to acquire an important power transmission link in the strategic northeast region is awaiting approval from the home ministry, said two people aware of the development.

This comes against the backdrop of the department for promotion of industry and internal trade (DPIIT) on 18 April notifying changes in the foreign direct investment (FDI) policy by mandating government clearance for all FDI inflows from countries with which India shares a land border.

Mint had earlier reported about the Indian government seeking ownership details before allowing CLP India Pvt. Ltd to acquire the 254-circuit km Kohima-Mariani link that passes through Manipur, Nagaland, and Assam from Kalpataru Power Transmission Ltd (KPTL) and Techno Electric & Engineering Company Ltd.

This comes in the wake of India making norms for clearances more stringent for power transmission projects as these are of a strategic nature. The country recently suffered a scare with Red Echo, a hacker group affiliated with the Chinese government, repeatedly targeting the control rooms that manage India’s critical power grids in a massive campaign that could have caused widespread blackouts.

“CLP is yet to get the clearance. The matter is currently with the ministry of home affairs (MHA)," said a government official, one of the two people mentioned above requesting anonymity.

Hong Kong-listed CLP Holdings was founded in 1901 as China Light and Power Co. Ltd, and it is the holding company for CLP Group, which has a 60% stake in CLP India. The rest is held by Caisse de dépôt et placement du Québec (CDPQ), one of Canada’s largest pension funds. CLP India has invested 14,500 crore so far in India and has a power project portfolio of 3GW.

“As previously disclosed by CLP Holdings, CLP India is seeking to acquire Kohima Mariani Transmission Limited and the transaction is subject to agreed conditions precedent and approval from the government in relation to the new Press-Note 3 announced in April 2020. CLP India has applied for the requisite approvals and hopes to receive a positive response from the government of India," CLP India Private Limited said in a statement to Mint.

A CDPQ spokesperson declined to comment.

According to CLP India, the family of chairman Sir Michael Kadoorie is the single largest shareholder group with a 35% stake. Institutional investors in Asia, Europe, the UK, and North America hold a 36% stake, with the remaining 29% held by mostly Hong Kong-based retail investors.

Queries emailed to the spokespersons of KPTL and the ministries of home and power late on Tuesday remained unanswered.

“DPIIT has issued a general order wherein the ministry concerned has been given the responsibility," said a commerce and industry ministry official requesting anonymity.

India has also imposed prior-permission requirements for power equipment imports from countries with which it has a conflict, and is adopting caution in the wake of blurred ownership lines between state-run and privately-held companies in China.

Also, equipment being imported will be tested and certified to prevent any ‘trojan horse’ or malware slipping through.

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ABOUT THE AUTHOR
Utpal Bhaskar
"Utpal Bhaskar leads Mint's policy and economy coverage. He is part of Mint’s launch team, which he joined as a staff writer in 2006. Widely cited by authors and think-tanks, he has reported extensively on the intersection of India’s policy, polity and corporate space.
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Published: 18 Mar 2021, 12:10 AM IST
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