Wednesday, May 25, 2011

India plans sovereign wealth fund for energy assets abroad

Planning Commission is now setting its eyes on a sovereign fund to acquire energy assets around the globe. The government is planning to set aside $10 billion for the fund. Moreover, 2-5 per cent of India's forex reserves may be set aside for the fund.

“We have been asked to look into the feasibility of setting up such a fund for energy assets. Given the present resources situation a fund like this is necessary. I believe a paper has been prepared and will be examined by the group of ministers,” said Montek Singh Ahluwalia, deputy chairman of Planning Commission.

As part of energy security, India will now look at countries like Bhutan, Nepal and Myanmar to tap their hydel potential. ONGC Videsh will use the funds money to acquire large oil and gas resources overseas. The fund will focus on acquiring oil and gas assets in Africa, Malaysia, Venezuela, Nigeria and Angola.

It must be noted that the $10 billion infra debt fund is still stuck in the corridors of the finance ministry. Given the fact that India's oil imports are likely to grow by four times at current levels in next 20 years, hopefully the government will be prompt in setting up the sovereign wealth fund.


Source: http://profit.ndtv.com

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