Karnataka seeks $4 billion private investment to expand power grid

By Rajesh Kumar Singh

 

The southern Indian state of Karnataka, home to the country’s technology hub Bengaluru, is seeking 350 billion rupees ($4 billion) in private investments to expand its grid network, according to a government official. 

The funds, needed over five years, would be part of a total 600 billion rupees needed for the intra-state grid, Pankaj Kumar Pandey, managing director of Karnataka Power Transmission Corp., said in an interview on Thursday. 

 

“This will be the first time we’re going to have private companies invest in the state’s power transmission network,” Pandey said on the sidelines of the India Energy Week conference in New Delhi. The provincial government will contribute the rest, he said.

 

Prime Minister Narendra Modi’s administration has been pushing states to bring in the private sector to accelerate grid expansions, as government resources may fall short of the requirement. The country has prepared a 9.2 trillion-rupee plan to widen its grid network to meet growing electricity demand and accommodate more green power.

 

Transmission bottlenecks have been cited as a key challenge to the growth of the renewables industry across the globe, with demand for grid equipment overwhelming supplies.   

 

The state is exploring to monetize its existing transmission assets through an infrastructure investment trust, or InVIT, Pandey said. These trusts are an investment vehicle that pool money from investors to buy and operate infrastructure projects, such as roads and power transmission lines.