Investors’ confidence in Bihar’s power sector is set to get a further boost, with the Nitish Kumar-led JD (U)-BJP alliance returning to power with an absolute majority in the recent assembly polls. Bihar has attracted the attention of power sector investors during Kumar’s previous term as chief minister.
Central utilities like NTPC, which had turned cautious about investing in Bihar over the deteriorated law and order situation in the state and also because of the weak financial health of the state electricity board, seem to have changed its mind.
Significantly, NTPC’s tripartite agreement with Bihar and the Union finance ministry, which secures payment for power supplied to the state, is valid only till 2016. NTPC then was reluctant to set up more power plants in the state. But now it does not seem to have any such reservations. The central utility is setting up 1,320 MW Barh-II in the state. It is developing another plant, 1,000 MW Nabinagar thermal power project, in partnership with the Indian Railways. NTPC has only recently commissioned its Kahalgaon expansion power project in Bihar.