India's power sector is booming. Who's paying for it?

Summary: As India continues to rapidly scale its electrification and transmission projects, it is time to shine a spotlight on the players funding the country’s power grids. It’s hard not to miss the rapid electrification across the country. Be it the cranes, solar panels, transmission towers or substations being built in districts that ran on diesel generators not long ago, India’s power build-out is large, fast and easy to photograph. However, what’s important to understand is how these projects are run. More importantly, who is funding them? You see, power projects don't run on ambition. They run on borrowed money. And power players don’t find it easy to raise capital. Reason? The slow nature of cash flows generated by projects through supply contracts and regulated tariffs. India's plan for its power sector puts hard numbers behind that idea. The country needs roughly Rs 14.54 lakh crore in power infrastructure investment between 2022 and 2027, and another Rs 19.06 lakh crore between 2027 and 2032, for a total of about Rs 33.6 lakh crore. This covers both new generation capacity - solar, wind, hydro, thermal - and the vast transmission network needed to carry that power from where it is made to where it is used. The plan assumes most projects will be funded with roughly 75 per cent debt and 25 per cent equity. Run that calculation, and you're looking at a multi-decade demand cycle for long-term credit worth tens of lakh crore. That is not a footnote to the electrification story. That is a central chapter of it. And that is precisely when power financiers stop being background characters. A history of financial mess If you followed Indian power sector news in the 2010s, you'll remember what went