Credit crunch hits Indian power investment plans

[bananas]

http://pepei.pennnet.com/Articles/Article_Display.cfm?Section=ONART&PUBLICATION_ID=6&ARTICLE_ID=336855&C=INDUS&dcmp=rss

Credit crunch hits Indian power investment plans

13 August 2008 - Indian power companies are expected to delay billions of dollars of investment plans because depressed global markets are making it hard for them to raise the necessary financing, according to a new report cited by the Financial Times.

The Financial Times writes that investment plans totalling at least $10bn - including $4bn in equity and the remainder in debt - are facing delays, meaning that India could fall well short of an ambitious plan to add about 90 GW to its existing power-generating capacity of 145 GW by the end of 2012, the report from London-listed brokerage Arden Partners said.

Those companies affected could include Adani Power, a company with investment from the UK's 3i Group which has filed a prospectus for an initial public offering expected to raise between $1bn to $1.5bn, and JSW Energy, which had been looking to raise a similar amount.

"We had thought the market might be headed towards oversupply but the credit crunch has removed the bubble," said Guy Brown, engineering analyst with Arden Partners, a London-listed brokerage and research house.

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[GliderGuider]

1. This is precisely what I've said would derail plans for the nuclear renaissance

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=115&topic_id=151122&mesg_id=151124
http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=115&topic_id=155655
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=115&topic_id=128980&mesg_id=128990

As the credit/debt crunch drains the global capital pool, investment in large-scale infrastructure like power plants is going to be hit very, very hard. Nuclear power will be a certain victim because of public opposition -- if money is expensive, you don't want to waste it fighting protracted legal and public relations battles.

[Dead_Parrot]

2. Logically speaking...

...the money hasn't completely disappeared, it's just gone off to places like India in the form of call centres, cheap steel imports and low-cost cars.
There must be some of it kicking around somewhere.

(With tongue somewhat in cheek, but you have to wonder... :) )

[GliderGuider]

3. No, a lot of it has actually disappeared.

Debt = money (Google video). A lot of debt has been written off in the recent mark-to-market events in the derivatives and structured investment markets, and that means money is disappearing into thin air. The recent failures of bond auctions in the US also means that operating capital is being reduced.

These friends of mine are keeping their finger on the world's financial pulse, and their considered opinion is that the debt crash we're going through represents a deflationary situation. If "debt = money", then as the debt is written off the amount of money in the system declines, which is the definition of deflation. Makes me right nervous, that does...