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Cabinet infrastructure panel clears 96 power projects

The cabinet committee on infrastructure, which met in New Delhi on Tuesday, has cleared 96 hydel and thermal projects placed before it by the Union power ministry.

Power Minister Y K Alagh said of the 96 projects, 76 were for rehabilitation, maintenance and modernisation. These include 56 identified thermal and 20 hydel power projects.

The government has also sanctioned eight thermal and 12 hydel power projects for accelerated power generation programmes.

Prof Alagh said all these projects would be entitled for a four per cent interest subsidy which would be made available to them from the Power Finance Corporation and an amount of Rs 2 billion would be available as subsidy this year alone. This would enable the PFC to finance power projects to the tune of Rs 10 billion, he added.

Prof Alagh said the cabinet has decided to take up these projects as part of the Ninth five-year plan and as a result the power sector will not be faced with any financial crunch.

The government would set up a standing committee consisting of a chairman and five other members who will make the parameters for negotiations on a project-to-project basis either with the state electricity boards, Indian companies, or with the foreign companies to bring about more transparency.

As a result of this, the country would have an additional availability of 14 billion units of power. Efforts will also be taken to improve the plant load factor, he added.

The government has also decided to increase the power grid so that it could cover the entire country and for that, an additional Rs 180 billion would be required which would be raised either by way of equity or way of converting the loans into equity.

For the rehabilitation and maintenance projects, each state electricity board would have to enter into an agreement with the PFC separately for availing subsidised interest rates, he added.