The net budgetary support to Central Public Sector Units (PSUs) under the Ministry of Power has been declining steadily over the years and stood at Rs 6,890 million in 1995-96. In response to the new power policy, till November 1995, 245 expression of interest letters were received for setting up power projects with a total capacity of 93,661 MW, with an approximate investment of Rs 3,397 billion. Out of these, 52 proposals are from foreign investors/NRIs and for joint ventures. Of these 16 proposals have been cleared by the government from the foreign investment angle.
The private power program calls for large investments which cannot be met adequately by the existing market or equity sources. Availability of low cost external resources, at least for initial years, is going to be critical factor for the success of India's power program.
Private power projects cannot be made commercially viable by increasing the rate of purchase of power from them. The tariff has to be kept down by keeping costs down. The cost of the projects can be kept down by keeping the cost of financing down.
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