What the Cabinet Decision Means
Under the new approval, POWERGRID can now invest up to ₹7,500 crore in equity per subsidiary, compared to the earlier limit of ₹5,000 crore. However, the overall cap of 15 percent of the company’s net worth remains unchanged.
This enhanced delegation gives POWERGRID greater financial flexibility to undertake large-scale transmission projects, particularly those that are capital-intensive and strategically significant for the national grid.
Boost for Renewable Energy Target
The decision is aligned with India’s ambitious goal of achieving 500 GW of installed capacity from non-fossil fuel sources. Efficient transmission infrastructure is critical to evacuate renewable energy generated from solar, wind and hybrid projects across various states.
With the enhanced investment limit, POWERGRID will be better positioned to support grid integration of renewable energy and ensure stable power supply across regions. Strong transmission systems are essential to balance supply fluctuations inherent in renewable generation.
Participation in High-End Transmission Projects
The approval allows POWERGRID to participate more effectively in Ultra High Voltage Alternating Current (UHVAC) and High Voltage Direct Current (HVDC) transmission projects. These advanced technologies are crucial for transmitting bulk electricity over long distances with minimal losses.
Such projects require substantial capital investment and technical expertise. By increasing the equity threshold, the government has enabled POWERGRID to compete robustly in large-scale transmission bids and expand its core operations.
Strengthening Competitive Bidding
The move is also expected to enhance competition in Tariff Based Competitive Bidding (TBCB) for transmission projects. Broader participation by experienced public sector entities can improve price discovery and ensure cost-effective project execution.
Improved competition in transmission infrastructure development is likely to benefit consumers in the long run by promoting affordable electricity and efficient grid management.
Strategic Importance of POWERGRID
POWERGRID is India’s largest transmission service provider and plays a pivotal role in maintaining the stability and reliability of the national grid. As renewable energy installations expand rapidly, transmission capacity must grow in tandem.
The Cabinet’s decision reinforces the strategic importance of strengthening the transmission backbone of the country. Enhanced financial autonomy will allow POWERGRID to respond swiftly to emerging infrastructure demands.
The move signals the government’s continued commitment to energy transition, grid modernization and infrastructure-led growth.
