Shortage of Rs 5 lk cr to fund country`s power projects: Govt

Last Updated: Thursday, September 10, 2009 - 14:08

New Delhi: The latest estimates of the government on Thursday revealed that there is a shortfall of about Rs 5,00,000 crore for financing power projects in the country.

"The power sector as a whole requires a huge investment
and there is gap of around Rs 5,00,000 crore in financing the
power generation capacity addition projects", Minister of
State for Power Bharatsinh Solanki said today while addressing
India Electricity- 2009 organised by FICCI.

Solanki said, "In order to achieve financial closure (of
power projects) in a time bound manner it is suggested to
increase the exposure limit of banks, foreign institutional
investors and non-banking companies. The limit should be
increased from 20 to 30 percent for individual borrowers and
50 to 70 percent for group borrowers."

The minister also suggested, "external commercial
borrowing by financial institutions like Power Finance
Corporation and Rural Electrification Corporation may be
brought under the automatic route (not requiring RBI
approval)."

He pointed out, "the issue of threats of Chinese dumping,
non-existence of level playing field, high cost of debt and
disparity in taxes and duties are hampering the growth of this
sector."

The power sector also needs support for super critical
technology and to provide help to new equipment manufacturers.

The minister also mentioned launching a national campaign
on energy efficiency involving all stakeholders and interest
groups at national, sub-national and regional level for
disseminating and popularising energy efficiency measures
through which the country can save up on 20-25 percent of the
current energy use.

Bureau Report



First Published: Thursday, September 10, 2009 - 14:08
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