Program on Energy and Sustainable Development Working Paper #48
August 16, 2005 - Updated July 2006
India stands out in the IPP study as the second largest developing country market and features an evolving legal and regulatory regime created in the early 1990s specifically to promote investment in greenfield independent power projects. India's electricity sector, which straddles state and federal jurisdictions, and India's experience with a diverse range of greenfield independent power producers have produced dramatic variation in investor strategies and outcomes, ranging from the disastrous Dabhol Power Project in Maharashtra to the modestly successful GVK project in Andhra Pradesh and Paguthan project in Gujarat. The experience of host governments at the state level has also varied. Given the political dynamics of the Indian power sector, discussed in detail below, it is hardly surprising that nowhere in India have politicians and state offtakers displayed truly lasting enthusiasm about IPP development. In each of the four Indian states examined in detail in this paper (Andhra Pradesh, Gujarat, Tamil Nadu and Maharashtra), officials have openly and regularly criticized IPPs.