New Delhi: The Indian power sector which is already reeling under a funding shortfall will need an investment of $400 billion during the 11th plan period (2012-17), power secretary P. Umashankar said on Thursday.
The government is worried about the fund scarcity in the power sector, which in turn threatens to exacerbate an energy deficit that’s seen as a key bottleneck in efforts to sustain and boost economic growth.
The 11th Plan (2007-12) has set a target of adding 78,577MW of power generation capacity, requiring at current estimates, some Rs 10.31 trillion of investment. According to the power ministry, the government expects a Rs 4.51 trillion funding shortfall. Even as the 11th plan target was revised to 62,374MW, total capacity added till date is 29,000MW.
India aims to add up to 18,000 MW of generation capacity in the current financial year, said union power minister Sushil Kumar Shinde at a power sector conference organised by lobby group Federation of Indian Chambers of Commerce and Industry (Ficci).
Mint had reported on 1 December about the government’s target of adding 20,359MW of power generation capacity this fiscal, which was later scaled down to 18,600MW. However, as per the internal analysis of the power ministry, a capacity addition of 15,000MW in the current fiscal and the overall capacity addition of around 55,000MW in the current plan is expected.
India currently has a power generation capacity of 167,000MW. The country has commissioned a capacity of 7,059MW so far in the current fiscal. In 2009-10, India added a capacity of 9,585MW as against a target of 14,500MW.
Projects are faltering because of reasons as varied as shortage of power generation equipment, delayed investment decisions, contractual problems, resistance to land acquisition, delays in environmental and forest clearances, geological issues and natural calamities.
In an unrelated development, Jindal Power Ltd(JPL), a company run by the family of ruling Congress party member of Parliament Naveen Jindal plans to raise Rs 7,000 crore through an initial public offering before the end of the current financial year, managing director RS Sharma said at the same conference.
The company is developing projects with a combined capacity of 10,480MW, of which 4,380MW is thermal power and the rest, hydropower. It plans to add another 4,180MW of power generation capacity and intends to set up nuclear, wind and solar power projects.
JPL was recently in the news when the environment ministry asked the Chhattisgarh government to take action against it for starting construction of the 2,400MW plant—comprising four units of 600MW each—at a site that had received environmental clearance for only a 1,000MW project (four units of 250MW each ). An expert appraisal committee later provided a breather to the project and recommended environmental clearance for the project which will require an investment of Rs 13,410 crore.