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The new government's resolve to pursue economic reforms appears set to catalyse the power sector's biggest revival in recent years. On the back of positive market sentiment, distressed power projects are finding buyers, companies are putting in equity and equipment orders are getting finalised. This comes after a nearly four-year-long dry spell, during which shortage of funds and policy issues hobbled development.

Experts say the sector is recovering faster than expected as companies believe a pick-up in economic growth will lead to a surge in electricity demand. Industrial production in India grew at 3.4 Percent in April due to improved performance of the manufacturing, mining and power sectors and higher output of capital goods. "We are hoping for a big revival in the power sector," said Ashok Khurana, director general of Association of Power Producers. "The sector is now looking up and waiting for a concrete set of actions to handle issues of fuel security, transmission congestion and electricity off-take."

Kameswara Rao, PwC India's leader for energy, said action that had slowed midway is now picking up. "Projects that were lying low have gathered some energy. The promoters of the projects that are half through have picked up pace of work," he said.

For instance, Visa Power's imported coal-based project in Chhattisgarh has placed orders for ancillary equipment. "The project is gathering momentum and the company has begun talks with Bharat Heavy Electricals, which is the main plant vendor, on cost and time overruns," industry executives said.

Similarly, equipment contracts for at least five power plants, totaling 5,000 mw capacity, are expected to be placed in a month's time. These include two projects of 1,320 mw each of Tamil Nadu generation utility at Ennore SEZ and Udangudi.

Source-On Request