Date:26/11/2008 URL: http://www.thehindu.com/2008/11/26/stories/2008112652821800.htm

Business

Meet to discuss problems in power projects

Special Correspondent

Power Secretary assures developers a helping hand

Report on Empanelment of Energy
Service Companies released
Commercial sector consumes 8 per cent
of total consumption

NEW DELHI: The Ministry of Power has decided to have a meeting with power project developers next week to thrash out their problems in securing funds from capital markets in the wake of the ongoing financial crisis.

“We are calling a meeting of the power developers in the first week of December to assess the situation,” Power Secretary Anil Razdan told newspersons here.

Fuel tie-up

At the meeting, while other problems with regard to fuel tie-up, land and water availability issues would also be taken up for discussion, Mr Razdan assured power developers of lending a helping hand and providing “solid support” to ensure speedy implementation of projects.

Banks’ reluctance

On the reluctance of banks in funding power projects owing to the liquidity crunch and sectoral exposure problems, Mr Razdan said: “There is no reason for the banks to shy away from the power sector.” As some banks are averse to lending credit to the infrastructure sector, project developers are finding it difficult to obtain funds even after fulfilling all conditions of borrowings.

Meanwhile, the Power Secretary launched the report on ‘Empanelment of Energy Service Companies’ (ESCOs) on Monday.

The report, according to an official statement here, aims to promote large-scale implementation of energy conservation and energy efficiency measures in existing facilitates through the ESCO route.

The Bureau of Energy Efficiency (BEE) has accredited 35 ESCOs through an accreditation process carried out by rating agencies CRISIL and ICRA, which would help in providing technical and financial due diligence that is necessary to create a sense of credibility among prospective building owners who are likely to secure the services of an ESCO.

Releasing the report, Mr. Razdan said that electricity consumption in the commercial sector was nearly eight per cent of the total consumption in the country and being the fastest growing end-use sector, its power needs were growing at more than 11 per cent annually.

Rapid growth

This rapid growth in consumption, he said, was largely on account of the growth of the services sector and the increasing use of energy-intensive appliances and technologies.