Fis Not To Fund Capacity Addition Above 5000 Mw

Financial institutions have told the power ministry that they will not be able to provide funds for additional power generation beyond 5,000 mw during the ninth plan. This falls woefully short of the power ministrys target of adding 57,000 mw during the plan. Madhya Pradesh alone would require 4,000 mw of additional power generation during the plan period.

At a workshop organised in New Delhi on the weekend by the power ministry to expedite capacity addition by independent power producers (IPPs), the financial institutions, including the Industrial Development Bank of India and the Industrial Credit & Investment Corporation of India, said the finance ministry should allow commercial banks to invest in the power sector.

 

This, according to them, will spread the risks involved thinner, besides increasing the funds available to the sector.

The IPPs criticised the government for delaying clearance of projects, adding to their costs. They said the coal ministry was holding up a number of projects by not formalising a coal linkage policy.

The railway ministry is also said to have come under fire from the IPPs for not committing adequate wagons to carry coal from pitheads to the project site. Without adequate guarantees from the coal and railway ministries for timely supply of fuel, said the IPPs, it would not be possible to commit large investments in power projects.

A representative of the financial institutions asked the government to put its own house in order before seeking funds from the institutions.