Foreign equity investment in the country’s power sector has shown some recovery during the current financial year. The sector attracted foreign investment of Rs 5,657 crore during April-September. These investments were led by France, Mauritius and others.
The sector attracted Rs 5,796 crore foreign investment in 2010-11, lower than 2009-10 investment figure which stood at Rs 6,138 crore. In 2008-09, it was Rs 4,033 crore.
Minister of State for Power K C Venugopal said installed power generation capacity in the country, as on October 31, was 1,82,689 Mw (megawatt).
Another 78,545 Mw based on thermal and 15,707 Mw based on hydro are under construction in the country for likely commissioning during the 11th and the 12th Five Plan periods.
It may be noted in order to attract foreign investments in the power sector, foreign direct investment (FDI) up to 100 per cent is permitted under automatic route for projects of electricity generation (except atomic energy), transmission, distribution and power trading.
Major contributing countries to the FDI equity inflows during this period are France, Mauritius, Singapore, UAE, the United Kingdom, the US and Morocco.
The sector attracted $330.99 million of FDI equity from the US during April 2008 to September 2011, said the minister.
However, the sector, which is struggling with funding shortfalls, will need an additional $400 billion (around Rs 1,800,000 crore) investment in the 12th five-year Plan period starting April 2012. The government is worried about the funding scarcity, which threatens to worsen energy deficit that is seen as a key bottleneck in efforts to boost economic growth.
The 11th Plan had set a target of adding 78,577 Mw of power generation capacity, requiring, at current estimates, some Rs 1,060,000 crore of investment. The power ministry estimates a Rs 4,20,000-crore funding shortfall.
