India seeks investments from US in Power Sector

Inviting US investments into the power sector, India has said both countries can work towards developing hydro and thermal power stations with the possibility of technology transfer.

"I see a huge technology transfer in the transmissions sector between the two countries in the areas of smart grid operability, micro grids tower technology and gas insulation on transmission towers. The US is well-equipped in putting large hydro projects in place," power minister Jyotiraditya Scindia said.

Scindia, who is on a visit to the country seeking investments in the power sector, said "US has expertise in large hydro projects and this is where India can benefit from it a great deal".

He said there could also be cooperation on thermal projects.

"I would urge them to engage with each other on a regular basis," he added.

On the Indian power sector the minister said: "We now have a capacity of 230 gigs (gigawatts) of power. In the last two decades alone despite all the problems that have beset the sector, India has added 165 gigs worth of capacity".

In the last fiscal alone, India added 20 gigs of capacity, he said adding on the transmission side, the Southern Grid will be interconnected by the end of Jan 2014.

"I believe that the transmission sector in the next four to five years will result in India having the largest capacity grid close to 200 gigs. This would have inter regional transferability of 65 gig which will be a feather in our cap", he said.

On the distribution side, Scindia said "the Achilles heel of the power sector needs to be strengthened and that's why we have put in some concrete steps in the last five months".

He said for the first time India made the annual credit rating mandatory for all the discoms to ensure their financial viability and transparency vis-à-vis the state lending agencies and the commercial banks, he said.

"I had released the first credit rating in February this year and plan to make this an annual feature", he added.

On financial restructuring for loss making discoms, the government has announced a scheme, wherein 50 percent of the short term outstanding liabilities will be put on to the books of the distribution companies and the state governments.

The balance 50 percent will be rescheduled with clear caveats and provisos of areas where these discoms need to perform in terms of reduction of Aggregate Technical and Commercial (ATMC) losses and filing for tariff revision on an annual basis.

He said this would also include "filing of accounts and encouraging more transparency and accountability and this is close to USD 30 billion package.

"We have eight or nine states that have come on board. We are now focusing on five or six states which would roughly to the tune of USD 20 billion".

PTI