India's power sector is estimated
to require massive investments
in the 12th plan period with some
sources putting the requirement to a
mammoth
13 trillio. ut of this
around
6.5 trillion will
be for generation,
2.5
trillion for transmission
and another
4 trillion
into distribution
infrastructure. This
mammoth investment
requires private
participants financing it -
but the uncertainties
plaguing the power sector
currently make the future
task tough.
Vikram Limaye,
Executive Director -
Infrastructure Development Finance
Company Ltd (IDFC) told Electrical
Monitor that 'investment also
depends on various uncertainties
that exist in that particular segment.
Currently in the power sector, there
exists uncertainty about coal and gas
supply-even entrepreneurs have
stopped lending to power sector
because there is no clarity on
availability of fuel.'
He added that the nation cannot
have an extended period of
uncertainty because power is very
essential for India's growth. He
didn't foresee this uncertainty
continuing for five years but if it
did happen then everyone should
forget about seven - eight
per cent GDP growth, he
added. But Limaye felt
that these uncertainties
would be sorted out as
investments required
in power sector were
very large.
Explaining that
disbursements also
depend on the type of
project; road project takes
two years to construct
while power project may
take three years. It
depends on project type,
complexities of the project and size
of the project.
IDFC aims to raise up to
5,000
crore though bond issues in the
current fiscal. It has issued its first
tranche of long-term infrastructure
bonds with a 9 per cent yield recently.
Last year IDFC raised
1,451 crore in
three tranches from over 7.3 lakh
retail investors.