Power supply could hit FDI flow to S Asia
Himalayan News Service
New Delhi, April 22:
The irregular power supply in South Asia could become a deterrent to the inflow of foreign direct investment (FDI) to the region, a leading US official said here.
“I know what it takes to attract significant business investment in this or any region — it takes electricity. If companies cannot be assured of stable and affordable power supply, they will not come,” warned Thomas J Donohue, the US Chamber of Commerce president and chief executive officer (CEO).”
“Energy deficiency status can affect foreign direct investment in future,” Donohue told a seminar organised by the US Chamber of Commerce’s South Asia Regional Energy Coalition.
On the occasion, he said that increasing levels of power trade between South
Asian countries and within India could address the anxieties of US corporations about making further investments in the region.
On a four-day long visit to India to interact with the Indian industry and government representatives, Donohue said, “I meet hundreds of leading American CEOs every year. And I can tell you there is growing interest in the markets and economies of South Asia.”
For the United States to “truly realise the vision of a prosperous and vibrant partnership between our nations, power is and must continue to be a vital component of this partnership”, he said.
Aimed at improving multilateral relations for sharing energy resources between countries of the subcontinent, the seminar brought together private investors, developers, independent power producers, government officials and regulatory bodies.
Experts noted India represented the single largest power market opportunity in the region and was a key player for facilitating expanded power trading in South Asia.
However, India’s growing deficit in electricity generation coupled with an inadequate transmission system and inefficient distribution network has continued to erode the financial viability of state electricity boards.
These impediments adversely impact the country’s economic development, the experts said.
While India still has much work to do - with just 60 per cent of its homes
having electricity — it best represents the possibilities of enhanced power trading in South Asia and also an emerging market for South Asian countries like Nepal, Bhutan and Bangladesh, said T N Thakur, chairman of Indian state-owned Power Trading Corporation (PTC).
“Regional power trading could convert local demand-supply mismatches into complementarities for participating countries, enable optimal utilisation of existing capacities and introduce greater flexibility in tariff setting for the power sector,” Thakur said.