The power ministry has projected a mammoth fund requirement of Rs 10.33 lakh crore over the next five years (2017-22) for completion of the targeted electricity generation capacity during the period. This is a 40 per cent jump over the funding requirement of Rs 6.43 lakh crore estimated in 2012 for meeting the targets of power capacity addition in the current Plan period ending March 2017.
The estimate for the five year period between 2017 and 2022 includes Rs 8.59 lakh crore for setting up 72,000 Megawatt (Mw) capacity in the conventional space and an additional 115,000 Mw in the renewable energy sector, apart from Rs 1.74 lakh crore funding for what the ministry calls “advance action” for the period 2022-27.
Power ministry projects fund requirement of Rs 10 lakh crore over five years through 2022Power ministry projects fund requirement of Rs 10 lakh crore over five years through 2022 – ImageThe estimates are part of the draft of the National Electricity Plan (NEP) document compiled by the ministry’s technical and planning wing Central Electricity Authority (CEA). The document is prepared every five years for smooth commissioning of the targeted power capacity projects.
“The requirement of funds for generation projects for 2017-2022 has been assessed based on total capacity addition of 72,495 Mw consisting of 50,025 Mw of coal and lignite-based power stations, 4,340 Mw of gas-based power stations, 15,330 Mw of hydro generation and 2,800 Mw of nuclear generation,” CEA said in the draft NEP, inviting stakeholders’ comments on the document.
CEA said the fund requirement has been assessed based on assumptions of cost per Mw for various types of generation projects based on present day costs and year-wise phasing of expenditure. It clarified the estimate does not include funds required for Renovation and Maintenance of power plants and captive generation projects.
For the five year period beyond 2022, the ministry has estimated fund requirement to the tune of Rs 6 lakh crore. “The fund requirement for the period 2022-27 has been calculated based on capacity addition of 1,16,800 Mw consisting of 0 Mw thermal, 12,000 Mw hydro, 4,800 Mw nuclear and 1,00,000 Mw renewable capacity addition,” the CEA said.
Power ministry projects fund requirement of Rs 10 lakh crore over five years through 2022Power ministry projects fund requirement of Rs 10 lakh crore over five years through 2022 – Image CEA said the fund requirements for 2022-27 have been assessed based on assumptions of cost per megawatt for various types of generation projects based on escalation of 20 per cent of present day costs, except for solar projects, the cost of which has been retained and year-wise phasing of expenditure.
The document also states 70 per cent of the cost of central sector projects and 80 per cent of the cost of state sector projects would be met through debt. For private sector projects, the debt component has been assumed at 75 per cent.
The NEP document also states debt for the projects would be sourced through domestic term loans from banks, financial institutions and Life Insurance Corporation (LIC). The government would also source debt from domestic bonds and foreign currency loans in addition to a $1-1.5 billion fund that would be set up through the Indian Renewable Energy Development Agency Ltd (Ltd) for renewable projects. Pernell McPhee Womens JerseyShare This