Indian Economy News

India eyes private capital for Rs. 9,15,920 crore (US$ 107 billion) grid expansion

  • IBEF
  • January 7, 2025

India is urging states to attract greater private capital to accelerate the expansion of its power transmission network, aiming to overhaul the country’s grid and accommodate an increase in clean energy. States are encouraged to monetise their transmission assets by transferring ownership to businesses for a set period and reinvesting the proceeds into new projects, as the Central Electricity Authority recommends. Power regulators are also advised to implement a pricing system that ensures predictable revenue streams for investors.

The nation plans to invest Rs. 9,15,920 crore (US$ 107 billion) by 2032 to develop additional transmission lines, supporting its goal to nearly triple its clean power capacity. New networks are also essential for transporting power from established coal plants to meet growing demand. A third of the investments will be directed towards regional networks, where state-run entities largely manage the grid. Given the competing demands for public financing, the report highlights the need for increased private investment. Monetising brownfield assets is considered a safer and more attractive option for private investors. The report suggests that predictable cash flows will be crucial in securing private capital, which may require shifting from current regulations where transmission charges for most intra-state networks are revised every five years. Investors will also seek payment security and a steady pipeline of assets for privatisation.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

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