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shortage has been identified as a major obstacle to India's economy.
That's precisely why the government accords top priority to foreign
investment in this capital-intensive sector.
to be noted:
total of some 80 projects for about 38,000 MW of new power have
been cleared in principle by the Government, which means that
their promoters must file their detailed project reports with
the Central Electricity Authority, and outline plans for funding,
fuel supplies and power purchase agreements.
power projects are based on a 16-18 per cent return on equity,
so their costs are high. Since they have to sell their power to
the financially weak state electricity boards, there were concerns
about whether the foreign investors would get their money back.
To allay these fears, the government provides guarantees to foreign
investors in projects found viable.
series of approvals are required for power projects. These include
'in principle' endorsement of a project followed by approvals
of techno-feasibility reports, funding plans, clearance by environmental
authorities, Foreign Investment Promotion Board etc.
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