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and other financial institutions – such as the Life Insurance Corporation of India (LIC)and Employees’ Provident Fund Organization (EPFO) – bearing the remaining 15.4per cent. State Electricity Boards account for 46.1 per cent of loan outstanding.Sector/environment concerns have made financiers proceed with caution: some largedevelopers have multiple projects under construction and the leverage has increased.Financiers are wary of lending further without enhancement in equity base. Powersector concerns that are under sharp focus include domestic coal shortage, worrisomestate of utility finances, continuing dip in the short-term price of electricity, and risingcommodity prices and borrowing costs with fixed price contract for sale of electricity.Financiers are therefore bound to exercise more caution, although this need not be abarrier and could help bring the focus back on improving the preparedness of projectsfor financing as well as on addressing fundamental underlying factors impacting thesector’s sustainability.Financing for advanced technologies has its own characteristic requirements, andhaving a policy road map for supporting advanced technologies is a basic requirement.The framework must have cost reduction/commercialization roadmap. Until technologytransits into being baseline, commercial finance will be difficult to harness. Governmentwill have to play a leading role to develop projects and multilateral/bilateral financialinstitutions could be tapped to part-finance such projects. In the R&D/demonstrationphase, state and central public sector units (PSUs) will have to play an important roleand provide upfront capital subsidies/grants to avoid burdening distribution utilities.Summing up the discussions, Mr. Kirit Parikh, former Member of Planning Commission,opined that the independence of the regulator is a must to attain preferable conditionsfor motivating finance from the market. The regulator should carefully device and adviceon the tariff plan so that the utilities and Discoms have appropriate operational marginsand are self-dependent. Coal imports to inland sites are a nightmare in view of thetransportation linkage from port and the transportation arrangements, and these addto the price of the coal. Trading imported coal involves transaction costs that need tobe covered. Fluctuations in the international prices of coal have also caused a majorconcern. It is essential to improve the efficiencies of indigenous coal mining and tomake major efforts in underground coal mining. It is not sufficient to focus only on coalcombustion technologies that will help reduce the emissions; the quantity of coalavailable also needs to be improved.The Integrated Energy Policy had made 122 recommendations out of which 40 havebeen implemented thus far, another 40 are in a state of possible implementation, andthere is an agreement on 20 recommendations that may be followed. However, there isno agreement among different ministries on the implementation of the remaining 22recommendations. It is for the government now to consider whether the energy policyneeds to be revisited.FSession V: Panel discussion on development of power sectorwith reference to advanced FFTsThe Session was chaired by Mr. V. Raghuraman, former Principal Adviser (Energy),CII. Following were the panellists:24