Indian power projects worth $12.75 billion, stalled because of a lack of fuel linkages, will sign supply accords with Coal India Ltd. by Sept. 6, Finance Minister Palaniappan Chidambaram said.
“Our highest priority is to get the investment cycle restarted,” Chidambaram told reporters today in New Delhi.
The cabinet committee on investment is reviewing the progress of the projects and trying to remove hurdles, Chidambaram said. Coal India has been asked to sign supply accords with power projects planned after March 2009 and having a total capacity of 78 gigawatts, spokesman Devendra Prasad said in an interview.
Chidambaram is seeking to win back investors to shore up the rupee that has plunged the most among its peers in Asia this year and spur an economy that grew at its slowest pace in a decade. Frequent outages lower factory output and deprive more than half of India’s population of education and healthcare.
“Such efforts send a very positive signal to investors,” said Amit Patil, an analyst at Mumbai-based Angel Broking Ltd. “Restarting stalled projects would mean that unutilized money flows into the economy.”
Stalled power, road and port projects are driving away investors, leading to an unprecedented current account deficit and causing the rupee’s fall to a record. Average peak power supply in the country lagged demand by 6 percent in the four months to July 31, according to data from the Central Electricity Authority, a unit of the federal power ministry.