Are power purchase agreements useful?
Widespread, unannounced power cuts in the urban and suburban areas, industry closure for days on end and large-scale use of diesel gensets to rear the paddy crop reminded Punjabis of the era of power shortage in the state. For decades, power cuts in summer left domestic consumers, farmers, industrialists and shopkeepers fuming. Something had to be done.
New generation capacity had to be added, quickly. For a financially challenged state like Punjab, rustling up ₹20,000 crore was out of the question. Even financial institutions would demand substantial equity contribution from the promoter/state.
