Govt launches power fund

In a major financial assistance for the power sector on the eve of the dissolution of the Lok Sabha, the government launched the India Power Fund.

The fund has been launched with an initial corpus of Rs 200 crore, contributed by Power Finance Corporation, which is expected to go up to Rs 7,000 crore over the next five years.

The fund has been created for the purpose of meeting about 10 per cent of the estimated shortfall of Rs 70,000 crore in equity requirement for the power sector till 2012.

"The primary objective of the fund is to contribute in the equity shortfall of viable power projects up to 10 per cent of the project cost. IPF is envisaged to be a venture fund in the beginning and a mutual fund at a later stage that would attract retail investors," Power Minister Anant Geete said, while launching the fund.

He also called upon other public sector utilities, financial institutions, banks and private investors to contribute in the fund. "Investing in Indian power sector is absolutely safe... I call upon the private sector to come and invest," Geete said.

For a contribution of about 10,000 Megawatt in capacity addition from the private sector over the next five years, an equity infusion of about Rs 1,000 crore will be required. "IPF would be instrumental in meeting this demand," he said.

Asked about the launch of the scheme on the eve of Lok Sabha dissolution, Geete said general elections were a mere coincidence and the scheme was not launched keeping them in mind.