The Government plans to set up a Rs500bn debt (US$10-11bn) fund for the power sector, Power Secretary P. Uma Shankar said on Thursday.
"There are thoughts of setting up a debt fund. It's at a planning stage," Uma Shankar told reporters on the sidelines of an industry event.
Uma Shankar said he doesn't expect power projects to face funding shortages. "We are working on various options," he said, without elaborating.
A separate US$11bn debt fund for infrastructure has already been announced.
Uma Shankar said that an investment of Rs5 trillion was required to meet a target to build 100,000 mega watt (MW) generation capacity in 2012-17.
India has set ambitious goals for expanding its installed generation capacity, which currently stands at about 164 GW. It set a target to add 62 GW over five years to March 2012 and another 100 GW from April 2012 to March 2017.
Private companies may add half of the power generation capacity in the five years ending March 2017.
The Planning Commission said in a recent report that capacity shortages in the power sector could prevent India from achieving double-digit growth.