INDIA'S POWER PLANTS ATTRACTING FOREIGN BUYERS

• Indian power assets are attracting foreign buyers keen to invest in a sector that is unable to meet demand, even as the owners of those assets struggle with debt and impediments to growth.        
• A consortium led by Abu Dhabi National Energy Co. of the United Arab Emirates, for example, is in the final stages of talks with Jaypee Group, an Indian construction and power company, to buy two of its hydroelectric projects in the north Indian state of Himachal Pradesh for up to $2 billion, two people familiar with the talks said last week.                                   
• Recent deals include the purchase by Singapore's SembCorp Industries Ltd.U96.SG -0.19% early this month of a 45% stake in a power project jointly owned by NCC Infrastructure and Gayatri Energy Ventures for 175 million Singapore dollars (US$139 million). Tang Kin Fei, group president and chief executive of SembCorp Industries, at the time said expanding the company's India foothold will provide opportunities "to grow significantly in years to come."                                             
• In December, French energy company GDF Suez SA GSZ.FR +2.04% bought a 74% stake in a coal-fired power plant in south India owned by Meenakshi Energy & Infrastructure Holdings Pvt. Ltd. GDF Suez said the deal was part of its strategy of investing in fast-growing markets.                    
• Foreign buyers are entering a market where domestic companies have faced an acute shortage of coal—which fuels more than half of the country's power generation—and excruciatingly slow approvals for everything from land acquisition to environmental clearance. This has led to chronic power shortages that have hampered India's economy and left around a quarter of the country's people without electricity.

• Meanwhile, power companies' debts—partly the result of low tariffs set by states that are reluctant to raise them—are piling up and many are looking to sell assets on the cheap.                    
• "Someone's loss is another's gain," said Hari Das Khunteta, chairman of Mumbai-based financial-services firm Altius Finserv Pvt. Ltd., explaining foreign interest in the nation's power assets. "This is a good time for overseas companies to buy into operational or under-construction plants," and doing so enables the investors to avoid the long, often painstaking early phases of acquiring land and gaining the necessary government approvals.                                                                                      
• In fact, many of the assets that are attracting buyers are losing money. Yet the sector has tremendous growth potential. Around 25% of India's population still lacks access to electricity, according to the World Bank, and the nation's Ministry of Power says the country suffers from a supply deficit of around 8%-10% during peak hours.                              
• India plans to expand its power-generating capacity by 44% through March 2017, which would require an estimated 13 trillion rupees ($210 billion) in investment. Yet as of October around $115 billion of such investment is stalled due to delays in the necessary clearances, according to the government.           
• The government in recent months has taken steps to speed up approval of some new plants under construction, but analysts say it could be years before these steps yield electricity.                    
•  Meanwhile, company debt remains. Lanco Infratech Ltd. 532778.BY 0.00% , a Gurgaon-based construction and power company, has said it is eager to sell some of its power and road assets to cut its debt, which stands at around $5.7 billion. This month it sold one of its hydroelectric projects in northern Himachal Pradesh state to Greenko GroupGKO.LN -0.54% PLC, an Indian power company listed in London, for €77 million ($106 million).