Betting big on India’s growing power requirements, which is the sixth largest energy consumer accounting for 3.4% of the global energy with a lower per capita consumption of 612 KWH, US power producer AES Corp has announced that the company will invest $15 billion to expand its capacity to 10,000 MW in the country.

In his interview to Bloomberg and Economic Times, Paul Hanrahan, CEO of AES, who accompanied US President Barrack Obama to India, said that the company will raise the money from the domestic market to fuel its expansion plans.

“The equity part would be $4 billion to $5 billion,” Hanrahan said, adding that the remaining part would be financed by banks.  The company’s Indian subsidiary may be listed in next three to four year to raise funds, he said.

AES has presence in 29 countries with a total production capacity of 40,334 MW and employs over 27,000 people worldwide. In India, AES currently owns 49% in a coal-fired 420 MW power plant in Orissa Power Generation Corp which was acquired in 1998.

The Orissa plant’s capacity will be increased by 1,300 megawatts by 2014 and another 1,300 megawatts three years after that, Hanrahan said, adding that the company will look in to joint ventures as well.

AES has also signed a memorandum of understanding with Chhattisgarh to develop a 1,200 MW power station. The company is targeting 10% of its revenue from India and 25% from Asia in five years, Hanrahan said. Revenue from India is currently “inconsequential,” he said.

According to Bloomberg Data, AES received about 4.6 percent of its revenue from Asia last year, compared with 69% from Latin America and 21% from North America.

According to Hanrahan, 90% of the 10,000 MW would be produced either from coal or gas and the remaining 10%would be from renewable sources.

After domestic companies like Anil Ambani-led Reliance Power, Tata Power and state-owned top power producer NTPC, who are investing heavily on power generation, AES is one of the serious players from overseas which announced its interests in India’s growing power sector.

India has already announced an ambitious target of expanding its total production capacity to 2,00,000 MW by 2012 which already had seen some slippages. It is estimated that the power requirement in India will reach 4,00,000 MW by 2020.

According to the Energy Coordination Committee headed by Prime Minister Manmohan Singh, India’s power requirement by 2030 would be between  800,000 MW and 950,000 MW to achieve the targeted growth of over eight percent annually.

For meeting this target, India needs an investment of $1.2 trillion in both public and private sector, over next 25 years to provide electricity to consumers at affordable cost.

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