New Delhi: In a major financial assistance for the power sector on the eve of dissolution of Lok Sabha, Government today (Feb 5, 2004) launched 'India Power Fund' which would have a corpus of Rs 7000 crore over a period of time.

To start with, the state-owned Power Finance Corp (PFC) announced a contribution of Rs 200 crore for launching the fund. The fund has been created for the purpose of meeting about 10 per cent of the shortfall of Rs 70,000 crore in equity requirement for the power sector till 2012.

"The primary objective of the fund is to contribute in the equity shortfall of viable power projects up to 10 per cent of the project cost. IPF is envisaged to be a venture fund in the beginning and a mutual fund at a later stage that would attract retail investors," Power Minister Anant Geete said while launching the fund.

He also appealed to the other public sector utilities, financial institutions, banks and private investors to contribute in the fund.

"Investing in Indian power sector is absolutely safe... I call upon the private sector to come and invest in India. They would be rewarded," Geete said.

Hoping a contribution of about 10,000 MW in the capacity addition from the private sector over the next five years, there would be a requirement of equity infusion of about Rs 1000 crore. And IPF would be instrumental in meeting this demand by the private sector.

Asked about the launch of the scheme on the eve of Lok Sabha dissolution, Geete said General Elections were a mere coincidence and the scheme was not launched keeping them in mind.