India’s plans to overcome a severe electricity shortage by attracting private sector power producers to build plants may face significant hurdles because many potential developers are finding it difficult to secure financial backing for their projects, Dow Jones reports.
The Indian government decided in 1996 to attempt to add 12 000 MW of generating capacity by 1998. These short lead-time projects were to have their financial backing in place by 31 March 1998. But around 100 private sector projects are still seeking closure, and almost all of them are in search of non-recourse financing.
Financiers being approached to support these projects are not convinced that the independent power producers will be able to guarantee revenue flows.