Energy sector needs investment of USD 120-150 bn: Report

Ahmedabad, Dec 8 (UNI) India's power and energy sectors need investments to the tune of US dollar 120 to 150 billion over the next five years, according to a report jointly released by KPMG and CII at the India Energy Conclave 2007.

The report emphasises the need for strong private sector participation to complement public sector and to bring in the required capabilities and technologies.

Policies have increasingly recognised the need to promote private investment. Private interest in captive coal mining, oil and gas exploration and in power sector, has shown significant progress and is also envisaged in nuclear sector, the report said.

By world standards, India's current level of energy consumption is very low and the total annual energy consumption for India is estimated at 572 Mtoe (million tons oil equivalent) and the per capita consumption at 531 kgoe (kilograms oil equivalent).

With a target GDP growth rate of 8 to 10 per cent and an estimated energy elasticity of 0.80, energy requirement is expected to grow at 6.4-8.0 per cent, which means a five-fold increase in India's energy requirement over the next 25 years.

Commenting on the study, Manish Agarwal, Director, Infrastructure and Government Line of Business, KPMG in India said that Energy transport infrastructure such as ports, railways, pipelines and power transmission networks need significant investment. The policy now allows private participation in all these areas and some private sector activity is already under way.

Along with private participation, there is a move to bring in market mechanisms in the energy sector under an independent regulatory oversight. A gradual approach is important till the supply side position improves and more players enter the sector so that markets can work effectively, he added.

UNI