The numerous issues being faced by the Indian Power Sector such as fuel unavailability, tariff uncertainty and land acquisition delay etc, have jammed the sector, due to which various global power companies are currently holding their development and investment plants. According to the sources, such companies are considering opportunities in other less risky places such as Middle East and Vietnam.
According to the Financial Institutions and International Consultants, leading global companies & banks which were earlier actively involved in negotiating deals to enter in Indian Power Sector a year ago have currently developed cold feet - a move that will reduce the flow of technology and capital to the power sector where domestic banks are already reluctant to lend.
Spark learnt that at least half a dozen companies from countries such as USA, Japan & China are reviewing their plans of investment in Indian Power Sector.
CLP India, a subsidiary of the Hong Kong-based group with operations in Asia Pacific, Australia, Thailand, Taiwan and other countries, has long-term plans for the country but would expand in other markets if issues related to fuel, tariffs, power off take, land and regulatory clearances were not sorted out in few months.
Foreign presence in Indian power sector has been limited but was projected to grow as the market is vast and short-supplied and investors had anticipated a friendly policy regime. But even existing foreign companies such as CLP are worried while AES India, a unit of the global major AES, has already announced exit from most of its India operations.
India was marked in roadmaps of companies for high growth story. Some deals were at advanced stages. But with the adverse feedback on availability of coal, land and regulatory clearances, the overseas companies scaled back their India objectives. The companies have started looking beyond in Southeast Asian, Middle East and Africa.
According to the Experts, there will be a spurt in investments in Southeast Asia and Middle East that offer returns in the range of 10-12% as compared to about 16% in India. Several companies are opting for these markets.
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