labels: power, economy - general
Power sector faces fund shortage of Rs 450,000 cr in 11th Plannews
19 April 2007

New Delhi: The power sector continues to face the same dismal prospects in the 11th 5-year Plan as in the 10th Plan, with a combined shortfall during 2007-12 estimated at Rs4,50,000 crore during, nearly 45 per cent of the total investment requirement.

The 11th Plan capacity addition target has been set at 68,869 MW — the centre would add at least 37,000 MW, states 23,000 MW and private firms around 9,000 MW.

Of the 10th Plan target of 41,000 MW only around 23,000 MW have been added in plan period. Consequently, the capacity addition required in the 11th Plan would have to be 76,000 mw.

It is estimated that adding fresh generation capacity of over 70,000 MW with creating and upgrading transmission and distribution systems would require an investment of Rs10,31,600 crore besides.

However, according to the report of the working group on power for the 11th 5-year Plan, the sector would have a shortfall of Rs4,51,607 crore. Moreover, states, which expect to invest in adding around 24,000 MW in the 11th Plan, would need Rs514,167 crore.

On a debt-equity ratio of 70:30, states need an equity capital of Rs1,54,250 crore, but have no equity available to fund the expansion.

Out of Rs3,59,917 crore of the debt component required, the states can manage to arrange only Rs1,64,973 crore, leaving a gap of close to Rs2,70,000 crore in debt and equity together, after considering an additional Rs80,000 crore in funding by special schemes such as APDRP and ''Rajiv Gandhi gramin vidyutikaran yojana''.

According to the economic survey released in February 2007, the various state utilities suffered a loss of Rs26,150 crore, posting a negative rate of return of 27.43 per cent.

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Power sector faces fund shortage of Rs 450,000 cr in 11th Plan