Fi Consortium Mooted For Hydel Projects

The government is planning to set up a consortium of financial institutions (FIs) to fund hydel projects in the state sector. This is being proposed to meet the mega-financial needs of such projects which are beyond the scope of any single financial institution.

The financial institutions in the consortium would be allowed to seek risk guarantees from the state governments to back the government of India guarantee. A decision on this proposal is expected to be taken by the ministry of power today.

A ministry of power paper has recommended that the consortium should be created along with a mechanism for lending facilities from these FIs which could finance such projects on a continuous basis.

 

The ministry is of the view that a standing committee be formed to recommend the quantum of fund, appraise the projects on an annual basis and to monitor the utilisation of funds.

This move is being made to revive the sick hydel projects in the state sector. At present, the Planning Commission allocates funds for power projects in the state sector.

The government is also planning to create a hydel development fund which would exclusively fund hydel projects, based on Sambamurti Committee recommendations.

There are around 47 projects in the state sector to be completed during the 9th plan. The capacity that of the projects add to around 8,600 mw for which funds to the tune of Rs 23,257 crore are required. In all, there are 74 hydel projects aggregating to 17045.5 mw which are sanctioned and can be completed during the 9th and 10th plans.

The Centre recognises that the states are at a disadvantageous position and have not been able to raise adequate finances for hydel projects.