WOOING FOREIGN INVESTMENT: Union Power Minister, Sushil Kumar Shinde (centre) flanked by Secretary, Power, R. V. Shahi (right) and Chairman and Managing Director, Power Finance Corporation, V. K. Garg, at a conference in New Delhi on Thursday. — Photo: S. Subramanium

NEW DELHI: Union Power Minister Sushilkumar Shinde expects foreign direct investment (FDI) inflows to improve in the power sector as a result of recent road shows held abroad. He said there has been a good response to the four teams sent out to China, South Korea, Australia, New Zealand, Europe and the U.S.

The Minister, who has just returned after leading a delegation to the U.S., said foreign investors were expected to respond well to the ultra mega power projects now being proposed by the Government. He noted that lending agencies and investors were appreciative at the meetings held to inform them about the 4,000 MW projects each of which is expected to cost about Rs. 16,000 crore.

The Government is planning seven such projects in Madhya Pradesh, Gujarat, Maharashtra, Karnataka, Orissa, Andhra Pradesh and Chhattisgarh. The Power Finance Corporation, which is the nodal agency for these projects, has already invited expressions of interest for four of these projects.

Mr. Shinde told newspersons that the US Exim Bank had approved an investment of up to $1 billion by Khanjee Holdings in one of these projects. In addition, he said, many foreign companies had already submitted expression of interest for these projects.

Power Ministry officials said the prospective investors had been assured of a three-tier payment security mechanism, consisting of a Letter of Credit, an escrow account and the option of selling power directly to high-tension consumers in the case of default.

They said the shell companies set up by the PFC were working on behalf of the State governments to get all the clearances and conduct tariff-based bidding.

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