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Indian economy is going through a period of remarkable transformation. Economic growth is now reaching 10% mark. In the next decade, economic growth will be led by infrastructure development companies. Government of India has realized the need for investment and is inviting private companies to invest in the infrastructure space. The need for private investments in transportation & energy sector is very acute.
Energy sector - Electricity
India now needs investments to setup new power plants - 100,000MW of additional capacity by 2010.
Taking this as a clue, several companies are investing in infrastructure space. These investments are mainly greenfield ventures where the risks are high - but so is the payoff. Reforms in Indian Energy sector and the critical shortage of power in India has attracted several new players to invest in India. Indian companies are eager to tie-up with foreign firms and expand in India. The need for capital, technology and business experience drives Indian companies to look for collaboration with external investors.
Supporting this massive growth in power generation, opportunities are now opening up in manufacturing sector. But as the demand grows - particularly in solar and nuclear power plants, opportunities for new entrants will be very high. The recent agreement on nuclear cooperation between India & USA has created an advantage factor for American firms to tap into Indian market in civil nuclear energy space.
Closing Thoughts
Economic reforms in India are now touching the power sector. Given the high growth rate of Indian economy - the demand and the shortage of power has skyrocketed. Continuing reforms is ensuring that private players are being encouraged to enter the power sector. The potential for growth and wealth creation in power sector are enormous. |
