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Thomas J Donohue, President and Chief Executive Officer, United States Chamber of Commerce has said that the existing irregular power supply in the South Asian region might affect foreign direct investment flow in the region.
Addressing a seminar on 'Power Trading in South Asia Today', organised by the US Chamber of Commerce's South Asia Regional Energy Coalition in New Delhi, Donohue highlighted that only increasing levels of power trade between the South Asian countries and within India, itself, could address the anxieties of US corporations about making further investments in India.
Commenting on the correlation between stable power supply and FDI, Donohue said: "I know what it takes to attract significant business investment in any region -- it takes energy. If companies cannot be assured of a stable and affordable power supply, they will not come."
"I meet hundreds of leading American CEOs every year and I can tell you there is growing interest in the markets and economies of South Asia," he added.
Experts at the seminar highlighted that India represents the single largest power market opportunity in the region and is the key player for facilitating expanded power trading in South Asia.
However, India's growing deficit in electricity generation capacity coupled with an inadequate transmission system and inefficient distribution network has continued to erode the financial viability of state electricity boards. These impediments adversely impact the economic development in the country, experts at the seminar said.
Aimed at improving multilateral relations for sharing energy resources between the countries of the subcontinent -- India, Bangladesh, Nepal, Bhutan and Sri Lanka -- the seminar brought together interested private investors, developers, independent power producers, government officials and regulatory bodies.
In addition, current low exchange volume (about 2.5 per cent of total energy generation) with surplus power generation in the eastern region and the deficit in other regions and existing seasonal surpluses in almost all regions presents an abundant opportunity for short-term trading due to existing demand diversity in the region.
Nepal and Bhutan have excess hydroelectric capacity that can be used to offset some of India's electricity shortfall. Bangladesh, on the other hand, could benefit from immediate imports of electricity from India to the western part of the country to be offset in part by exports from future gas-fired power plants in eastern India, speakers at the seminar stated.
The deliberations between the participants at the seminar aimed at accomplishing the following objectives:
Educated the potential investors and IPP developers on how to enter India's emerging power trading market.
Identify key suggestions and solutions for facilitating greater regional energy cooperation in the future through trading of surplus electricity.
Motivate regional business councils and SAREC members in India, Nepal, and Bangladesh to be more actively engaged in promoting greater regional electricity trading.
The South Asia Regional Energy Coalition is a business forum through which public and private sector stakeholders can discuss and influence regional energy policy and reforms throughout South Asia.
It is funded by the US Agency for International Development's South Asia Regional Initiative for Energy Cooperation and Development (SARI/Energy) programme.
Donahue supports outsourcing
Donohue had earlier defended outsourcing of IT jobs to India, saying the current backlash is not based on facts but on emotions and politics.
The debate over outsourcing has generated more heat than light because even experts do not know precisely how many US jobs have been or will be outsourced overseas, he had said.
"Yet under any estimate or forecast, these jobs amount to a small fraction of our nation's 138 million workforce," he added.
Donohue said he was highly impressed with the workforce India has in the high-tech industry. "Those manning call centres are all graduates with a very high degree of technical qualifications. India has a huge pool of technology experts. But we lack such a pool of talented workers in the US," he had said.
He said by the year 2010, "We will not have a shortage of jobs, but rather a shortage of workers. We must expand the pool of available workers through education, training, immigration, and flexible workplace in order to generate sufficient economic growth and the necessary tax base to support the coming avalanche of retirees."