Citigroup's hedge fund unit eyes KVK Energy

Citigroup Inc.'s hedge fund unit Old Lane LP plans toinvest Rs 1.06 billion ($26 million) in India's KVK Energy & Infrastructure Pvt., as the world's second-fastest pace of economic growth lures investors.

Old Lane, bought this year by Citigroup, may acquire 26 per cent of KVK Energy, which builds power projects, company secretary Ram Mohan said in a telephone interview from Hyderabad, where KVK Energy is based. He didn't give a timeframe.

Prime Minister Manmohan Singh's government is planning to spend $149 billion to boost electricity generation and upgrade transmission and distribution networks, projects that are drawing investments from companies such as Blackstone Group LP and General Electric Corp. India aims to boost its power-generation capacity by more than half to 193,000 megawatts by 2012. The country plans to set up eight large power projects, each producing more than 4,000 megawatts.

Japan, the world's second-largest economy, has an electricity output capacity of 233,886 megawatts, according to the nation's trade ministry.

An Indian panel this week will consider proposals from KVK Energy and 17 other companies seeking to invest in India or sell stakes to overseas buyers, according to information posted by the industrial policy department of the government.