Infrastructure: Independant power projects (IPPs), Target Market Study; ANZ Grindlays Bank Plc.

Abstract

Much needs to be done in the power sector of the country to meet the growing demands. In the post liberalization era, industry is bound to receive a big boost and will place increasing demands on power generation capacity. The power generation capacity in the country as on 31.3.94 was 76,718 MW, comprising of 20,366 MW hydel, 54347 MW thermal and 2005 nuclear. This project was aimed to study the infrastructure sector in the country which is poised to take a big jump going into the 21st century. This being largely attributed to the opening up of this sector to the private sector and, very importantly, direct foreign investment, the sector seems an enormous opportunity for financial institutions and banks. Finance is the single most important aspect when the requirements of these projects are looked into. There is therefore enormous potential for the commercial banks to play a vital role. Power, telecom, steel and transport qualify as the major infrastructural areas of interest. The study was initially targeted at these areas but power is the only area where the developments are in an advanced stage and was where the data available could justify the time to be spent on the study. The telecom infrastructure projects in terms of basic services are in the tender stage and have a long way to go before the projects take off. In the course of the study, as is very evident throughout the country, it was observed that though there are a number of proposals for power projects in Karnataka whose costs run into thousands of crores of rupees, hardly any are close to implementation. The most well known among these, the Cogentrix project has run into fresh trouble with the Central Government with the authorities proposing further changes in the Power Purchase Agreement (PPA). Operating in an uncertain environment, most of the new power companies have not set up base in Bangalore in a big way as yet and none are even close to financial closure. Therefore, being impossible to collect financial data from here, a report on the GVK power project in. Andhra Pradesh was obtained through sources. Furthermore, most of the financial data is confidential.