ADB may fund ultra mega plants

The government plans to rope in the Asian Development Bank for financing five ultra mega power plants of 4,000 Mw, each of which will require an investment of Rs 15,000-20,000 crore, to boost the confidence of private developers and achieve faster financial closure.

The power ministry recently held talks with ADB officials to involve the Manila-based multilateral funding agency in the programme, for funding and other help for effective implementation of the projects, official sources said.

ADB's Deputy Director-General for South Asia John Samy confirmed that the bank had discussed the issue with the government and assured that it would consider assisting in the projects if required.

"ADB had discussions with the ministry of power about the ultra mega power projects. ADB fully supports the government's initiative to ensure energy security by increasing generation capacity through diversification of energy sources," he told PTI from Manila, Philippines.

Samy said the government's plan was to have the projects financed by the private sector once the project development work was completed by the special purpose vehicles established for this purpose by the Power Finance Corporation.

PFC has already sought expressions of interest for Sasan, Mundra, Sindhudurg and Karwar projects. It has now invited pre-qualification bids for Sasan and Mundra projects.

"As a long-term development partner ADB would follow the progress of these projects with great interest and would be prepared to consider assistance should it be required," he said, adding so far the government has not sought technical assistance support for these projects.

Sharing ADB's role in India's power sector, Samy said the bank's strategy was to assist with reforms and restructuring, infrastructure capacity expansion and removal of bottlenecks.

The bank would also assist in capacity building, private sector development and promotion of clean energy and energy efficiency, he said.

The bank would be working with national agencies like Power Grid corporation and states carrying out reforms pursuant to the 2003 Electricity Act, to address sector constraints and capacity issues, he added.

The funding agency had recently approved a $300 million multi-tranche financing facility for Uttaranchal power sector investment project.

The project would promote clean energy development, improve transmission capacity and build capacity in state's power sector companies and the regulator.

ADB President Haruhiko Kuroda, who visited India in early March, had said the bank would increase its total lending to the country from $1.2 billion in 2005 to $2.25 billion this year and $2.65 billion in 2007.