Financial closure of power projects get delayed

The government has extended the target for the financial closure of 20 private power projects, with a combined generation capacity of 8,000 Megawatts (Mw), by three months to June 2004. Most of these projects were expected to tie up funds by March this year, according to an announcement made by the government in November 2003.

"As many as 20 projects are expected to achieve financial closure by June this year," Power Secretary RV Shahi said on the sidelines of an international conference on power distribution here today.

With the financial closure of these projects, Shahi said the country would be adding more private generation capacity than it had added in the last ten years.

He said the Electricity Act 2003 had led to a renewed interest in the country's power sector.

Shahi said the projects were moving towards financial closure, an important step in tying up funds, following a meeting of stakeholders in January this year, where financial institutions resolved not to press for guarantees so long as promoters were reliable and tariffs reasonable.

The projects identified for financial closure include the GVK-promoted Jegrupadu phase II, Torrent Group's 1,000 Mw power project in Gujarat and a Nagarjuna group-promoted project in Karnataka.

Shahi said the government would achieve its capacity-addition target of 41,000 Mw set for the Tenth Plan period. Shahi said the government was targeting at electrifying 100,000 villages over the next two years, ahead of the 2007 deadline for providing electricity to all.

"Over the next two years, we will see 1,00,000 villages being electrified under the Accelerated Rural Electrification Programme," Shahi said. He said over a crore rural households would be provided electricity under the programme.

Shahi also said the government had launched a rural electricity supply technology mission with a view to devise technical solutions to the electricity problems of villages.

Power cut

• Most of the private power projects were expected to tie up funds by March this year.
• With the financial closure of these projects, the country will be adding more private generation capacity than it had added in the last ten years.
• Fis have resolved not to press for guarantees so long as promoters are reliable and tariffs reasonable.
• Prominent among the projects are the GVK-promoted Jegrupadu phase II, Torrent Group's 1,000 Mw power project in Gujarat and a Nagarjuna group-promoted project in Karnataka.