India's power sector faces 40% funding gap

The Indian government revealed that the power sector investment, which was envisaged at Rs 10 lakh crore for the current plan from 2007 to 2012, was facing a 40 %  funding gap.

“The fund requirement for the capacity addition envisaged in the 11th plan is estimated to be about Rs 10.60 lakh crore. Funds from all available sources are only Rs 6.4 lakh crore. Therefore there is a funding gap of about 40 per cent, which is equivalent to Rs 4.2 lakh crore,” Power Minister Sushil Kumar Shinde said.

Shinde said that state-run Power Finance Corp was playing a critical role in addressing the key issue of large fund requirement of power sector. In a span of 25 years, it has cumulatively sanctioned loans of Rs 3.46 lakh crore and disbursed loans of Rs 1.73 lakh crore to power sector and currently has a loan asset size of about Rs 1 lakh crore.

The installed capacity in the power sector in the country has grown from 1,23,901 Mw in January 2006 to 1,77,135 Mw in June 2011, he said.

He said a capacity of 37,971 Mw had already been commissioned during the 11th Plan till June 2011. The minister said during the year 2010-11, India had synchronised a capacity of 15,795 Mw. The Minister said the government had also initiated development of large transmission systems through private sector participation on the lines of Ultra Mega Power Projects.

Shinde said the other key concern of power sector had been the high Aggregate Technical and Commercial losses.