The Hindu Business Line : Govt plans to tap Gulf funds for power sector

Major PSUs in the power sector such as NTPC Ltd, National Hydroelectric Power Corporation Ltd and the Power Grid Corporation of India Ltd have been asked to identify specific projects for foreign government investments.

The investments could be in the form of debt and equity, said Mr R.V. Shahi, Secretary to the Union Ministry of Power.

Talking to reporters on the sidelines of the 16th Conference of the Electric Power Supply Industry on Monday, Mr Shahi said that the overseas investors could take up to 40-45 per cent equity in the projects. They could also form joint ventures with NTPC for a combined cycle power plant, where gas is sourced from the investor countries. But this is not a precondition for the projects, he said. Emirates such as Dubai and Abu Dhabi could invest in such projects.

Clearing bottlenecks

Mr Shahi said that to clear bottlenecks in power transmission, the Ministry has identified 14 transmission projects with a capital expenditure of Rs 20,000 crore. Expression of interest would be called soon from private parties for two projects involving an investment of Rs 6,000 crore — NTPC's 2,000-mw North Karanpura Super Thermal Power Project in Jharkhand and strengthening of Talcher (Orissa) - Kolar (Karnataka) power transmission lines, he said.

Mr Shahi said that the Rural Electrification Corporation would act as a nodal agency for the projects and set up `shell companies' to take the projects forward.

The company would obtain regulatory clearances. The projects on a Build-Own-Operate model would be awarded to private power companies on the basis of competitive bidding. The Independent Empowered Committee on Power has recommended the projects.

It will help evacuate power from the area of generation to the area of consumption, he said.

11th Five-Year Plan

Mr Shahi said that under the 11th Five-Year Plan, Rs 70,000 crore would be invested in the country's power transmission network, of which Rs 50,000 crore would be mobilised by the Power Grid Corporation of India Ltd and the rest from the private sector companies.

Merchant Power Companies

Mr Shahi also said that the creation of `Merchant Power Companies' would result in redundancies and surplus in the country's power sector.

Merchant Power Companies are floated exclusively for power trading and supply to industrial consumers. Such companies are not bound by regular power purchase agreements and would be free to supply power to industrial consumers. The Power Ministry has already written to the Coal Ministry for granting coal blocks to such companies with capacity of more than 500 mw, he said.

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