Lok Sabha Question No. 2205 (UNSTARRED), answered on 2018-03-08
Subject: Capital Crunch in Energy Sectors
Ministry: POWER
Asked by: JYOTIRADITYA MADHAVRAO SCINDIA, SUSHMITA DEV

## GOVERNMENT OF INDIA MINISTRY OF POWER

## LOK SABHA UNSTARRED QUESTION NO.2205 TO BE ANSWERED ON 08.03.2018

## CAPITAL CRUNCH IN ENERGY SECTORS

2205. SHRI JYOTIRADITYA M. SCINDIA: KUMARI SUSHMITA DEV:

Will the Minister of POWER be pleased to state:

- (a) whether  NITI  Aayog  in  its  National  Energy  Policy  has  stressed  the need to invest $ 150 billion capital in the energy sector;

(b) if so, the details thereof;

- (c) whether several thermal power projects which are under construction have been stalled due to capital crunch;
- (d) if so, the facts and details thereof; and
- (e) the steps Union Government proposes to take to face the challenge

## A N S W E R

THE MINISTER OF STATE (INDEPENDENT CHARGE) FOR POWER AND NEW & RENEWABLE ENERGY

( SHRI  R. K. SINGH )

(a) & (b) : NITI  Aayog  in  the  draft  National  Energy  Policy  has  indicated that  'Capital  requirement  in  the  energy  domain  is  the  biggest  challenge before the country.  This is aggravated by high interest rates as compared to developed economies.  A near $150 billion capital investment is needed in  energy  sector  on  an  annual  basis  until  2040  (International  Energy Agency).    This  has  to  be  met  without  impacting  availability  of  capital  in other sectors'.

(c) to (e) :    22  number  of  under  construction  thermal  power  projects, aggregating to a capacity of about 21,900 MW, are stalled due to various reasons including inability of promoters to infuse equity.

...........2.

Setting  up  of  a  power  plant  is  a  de-licensed  activity.  As  per Section  7  of  the  Electricity  Act,  2003,  any  generating  company  may establish,  operate  and  maintain  a  generating  station  without  obtaining  a license/permission  if  it  complies  with  the  technical  standards  relating  to connectivity  with  the  grid.  Decision  to  set  up  a  power  plant  is  taken  by concerned  developer  based  on  his  assessment  of  market  conditions, demand  of  power  in  future,  finance  options,  viability  of  the  project  etc. Developer has to arrange the capital and  all the inputs required to produce power i.e. land, water & fuel& necessary clearances. Sale of power under the Power  Purchase  Agreement  is  also arranged by the developer. Banks/Financial  Institutions  finance  projects  based  on  their  commercial assessment/appraisal.

Central  Electricity  Authority  (CEA)  monitors  the  progress  of under construction power projects through frequent site visits and interaction with the developers, equipment suppliers and other stakeholders to identify issues  critical  for  commissioning  of  projects  and help in resolving them. Regular reviews are also undertaken by Ministry of Power, Ministry of Heavy Industries and Cabinet Secretariat to identify the constraint  areas  and  facilitate  quick  resolution  of  inter-ministerial  and other  outstanding  issues.  A  Power  Project  Monitoring  Panel  (PPMP)  has been set up by the Ministry of Power for monitoring of on-going Thermal and Hydro Generation projects along with the associated transmission system. However, if the promoters do not bring in enough equity then the projects cannot proceed and the lending institutions are compelled to take action in accordance with the directions of the RBI and the law.

**************