Plan Panel told to help ease power sector clearances

Prime Minister Manmohan Singh has asked the Planning Commission to work as a coordinating agency to facilitate tie up of key physical inputs and statutory clearances for electricity generation and transmission projects.

According to sources, Singh asked deputy chairman of the Plan panel, Montek Singh Ahluwalia, to look into the matter when some chiefs of power CPSUs brought to his notice during a recent interaction how their investment plans and earnings were getting impacted due to the prevailing uncertainty about availability of critical inputs for project execution.

Developers are finding it difficult to get their projects off the ground, with bankers becoming cautious about lending to the power sector.

Industry sources said that bankers are increasingly insisting on fuel linkage, water supply tie-ups and availability of all statutory clearances and power-purchase agreements before approving loans to power projects, in a departure from the earlier trend when projects would achieve financial closure while these inputs were still awaited.

While the power ministry is supposed to facilitate tie-up of fuel linkage and environment clearances for projects, it does not have any power to issue directive to concerned ministries or agencies. As a result, developers are left on their own.

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