GUWAHATI, Feb 17 — There is good news for private sector power companies willing to venture into the North East India which is considered the power house of the country given its tremendous hydro-power potential. The South Asia Enterprise Development Facility (SEDF) is interested in financing privately-owned hydro-power projects, both mega and mini varieties, in the region.
Talking to this newspaper, Dr Anton de Wilde, the Programme Manager of the SEDF, informed that the SEDF was already in consultation with Tata Power which has shown interest in setting up hydro-electricity projects in the region. The SEDF is funded by International Finance Corporation (IFC), Royal Netherlands Government Department of International Development (UK), European Commission among others. The SEDF’s area of operations encompasses enabling business environment for small and medium enterprises (SMEs), providing capacity building services to SMEs, facilitating finance for SMEs and helping SMEs to get linked with larger corporations on special projects. Dr Wilde said that a study conducted by Government of India had identified three categories of hydro-power projects possible in the North East. These include : non environment impact and non displacement category, displacement of people and potential environment impact category and massive displacement category.
“We are now in consultation with Tata Power to find out which category of projects can be financed. In extending finance for any hydro-power project in N-E India we will look at the possibility of transporting the power generated to neighbouring Bangladesh. It is because of the ground reality that evacuating power from N-E to mainland India will be less profitable,” Dr Wilde said.
The SEDF is also keen to fund mini-hydel projects exclusively in private sector. The funding agency is not interested in Government sector projects for the reason that such projects are conceived more in political interests than economic. On the basis of its experience in North East, the SEDF which is headquartered in Dhaka, has identified private sector healthcare units, special agro-processing units like bamboo processing units, aromatic oil production projects as most potential areas and is keen to provide finance for these units.
In reference to rich bio-diversity of North East region, Dr Wilde underlined the need for ‘commercialisation of bio-diversity’ through application of bio-technology. He said the SEDF was keen to facilitate popularising and development of bio-technology in the N-E region which has ‘greater bio-diversity’ potential than any other country in the world. When asked about SEDF’s plan to help growth of private sector hospices in the region, Dr Wilde informed that it was keen to provide working capital, finance procurement of equipments, fiance medical services to train hospital staff. According to him state-of-the art hospices in North East would attract large number of patients from neighbouring countries including Bangladesh who are now flocking healthcare units in southern India, Kolkata and Delhi.
Dr Wilde pointed out that food processing was another potential area for N-E SMEs which can make use of the tax-free arrangement amongst the SAARC countries in getting the fruit produce of N-E processed in Bangladesh and then export it outside in a competitive price compared to products from Malaysia and Thailand. When drawn to dearth of bank finance for SMEs in the industry-starved N-E India, Dr Wilde commented that the banks needed be sensitised on the fact that financing SMEs could be much more profitable than financing big corporate houses. In this regard he cited example of several international bankers including the Citi Bank, National Development Bank of Sri Lanka etc, which have built their fortunes around financing SMEs. He said, “SMEs in India need better support from banks to face the global competition in the market.”
Dr Wilde informed that the SEDF had recently signed an MoU with the NEDFi to train the latter’s staff to focus on profitability of the SMEs and on how to guide SMEs on their product line in securing loans etc. “We will assist NEDFi on techniques on how to lend more profitably to SMEs,” he said adding that SEDF is keen to play the role of catalyst in helping SMEs to focus on more profitable areas. In reference to the practice of demanding very high collateral by the banks in N-E region while granting loan to SSI units citing the mounting NPA caused by dismal loan repayment, Dr Wilde said, “the banks attitude is not justified. The good businessman should not be victimised for no fault of their own. We are open to help banks in this regard.”