The Indian government claims that it expects independent power producers (IPPs) to sign deals for the construction of a further 15 000 MWe of generating capacity in India by March 1999, Reuters reports. The drive is part of a recently-announced mega-projects policy.
The government has also approved the formation of a new company, to be called the Power Trading Corporation, which will purchase power from large private sector developments and sell it to the various Indian states. Many of India's State Electricity Boards face serious financial problems, prompting IPPs to seek guarantees from the government before proceeding with generating projects.
Two state controlled companies, the National Thermal Power Corp and the National Hydro Power Corp, will jointly manage the Power Trading Corp. Equipment imported for construction of power stations will be exempt from duties.
India plans to add 40 000 MWe of generating capacity in four years. The target over 12 years is to built an additional 80 000 MWe. As part of this plan, the government is also proposing to make a levy on electricity. The income obtained from the levy will be invested in power sector development.
The legislation for the levy will be introduced during the winter session of the Indian parliament. The actual size of the levy has not yet been announced. However, the government has indicated that two-thirds of the money raised by the levy will be directed to states for the improvement of thermal power generation, while the remaining one-third will be used to develop hydropower.
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