Hidden Opportunities

Monday 17th May will be marked in Golden Words in Indian Infrastructure History because of a decision and action plan of “Planning commission” set up for the current fiscal year. Planning commission set a quarterly target for its infrastructure sector to monitor progress in power generation and building of roads and ports, which are believed to be crucial for the economic growth.

According to the targets set by the commission, both the central and state governments along with private companies, will add 20,359 MW of power to its present capacity. Of this, 4,126.5 MW will be added by the end of the quarter ending June 2010.

Though the target seems a little bit unachievable but still I’m sure that as the development will be monitored on a quarterly basis it will give a more controlled positioning and monitoring of the targets. The reason for me to think that the targets are more than optimistic and less of realistic is because of the last year status-quo.

During the last fiscal the government had set a target of 14,507 MW of Power generation capacity additions, but was able to add only 9,585 MW, i.e. the target was missed by 40%.

But the good news is that as the government is very keen and optimistic for the targets resulting in ample opportunities in power sector and the sector appearing more lucrative and worth investing. With the relaxed FDI (Foreign direct investments) limits of 100% in power and infrastructure promising new opportunities for the foreign investors to invest in India growth story.

There is immense potential in power and infrastructure sector but the way things will be implement will put new challenges to honor. One site we need to honor the commitment we as a country have in terms of reducing the carbon emission and on the other hand we need to keep the country moving by adding additional power generation installations.

As per statistics Fossil fuels are the source for 70% of 90,000 MW installed capacity for electricity generation, Hydro-electricity contributes about 25%, and the remaining is mostly from nuclear power plants (NPPs). This statistics of generation may be because of the opportunities, government norms, technicalities and what not but if we believe the statistics then any new investment will follow the same pattern.

The new opportunities appearing out of the new infrastructure targets seem to be in non conventional energy especially wind power. Wind power project are turning to be a lucrative investment avenues and to add more government is announcing more perks in terms of tax holidays, commitment of purchasing power generated and flexible tariff.

This a opportunity knocking at the doorsteps for People/entrepreneurs who are interested in cleaner energy, people who are farsighted and can see the benefits of implementing a Cleaner energy project at this juncture. I believe this is the right time to do a Value Investing and initiate a Power project that is eco friendly having early breakeven and having subsidiary projects of livestock farming, organic farming and carbon credit trading.