AES to spend $15 billion on Indian power sector

• 13 years ago (2010-11-14)
• Junior Isles

North America 998

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US power producer AES Corp. plans to spend as much as $15 billion to increase capacity in India. The Arlington, Virginia based company has operations in 29 countries and hopes to earn 10 per cent of its revenue from its Indian projects in five years.

“A big part of that would be financed by banks,” Chief Executive Officer Paul Hanrahan said in an interview “The equity piece would be about $4 billion to $5 billion,” he added.

AES’s plans are another boost to Indian Prime Minister Manmohan Singh’s government plans to tap private investments to assist infrastructure spending. They plan to double spending in India to $1 trillion in the five years ending 2017.

AES is looking for partners to build plants with a combined capacity of as much as 10 000MW. The utility may sell shares in its Indian unit in three to four years to fund these projects, said Hanrahan, who was among US business executives accompanying President Barack Obama on his visit to India.

The Indian market is attractive and AES is joining a long list of companies building power stations in the country. But building projects is not always straightforward. Michael Parker, a Hong Kong-based analyst with Sanford C. Bernstein & Co. said.
“Obstacles range from fuel linkages, transmission, funding, environment approvals and water-use rights. There are any number of details that can derail projects.”