India’s minister of Power, Sushilkumar Shinde, has confirmed a target of 88 000 MW of extra generation capacity in the next five years, as part of the country’s new 12th Five-Year Plan (2012-2017).

India’s current generation capacity is 200 000 MW, but still suffers from a peak shortfall of 10 per cent. Speaking at a conference of state power ministers, Shinde confirmed the target includes an addition of 5300 MW from nuclear power.

Speaking at the same conference, deputy chairman of the Planning Commission Montek Singh Ahluwalia acknowledged the financial condition of the distribution companies was a major concern for India.

“I think no bank will lend to power generation companies if the distribution is weak,” he told reporters.

To help address this issue, Shinde confirmed that banks have agreed to covert state electricity board (SEB) loans into equity.

“The National Electricity Fund will give interest subsidy to discoms [distribution companies] for two-years.”

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