By the second half of the 1990s, India's reforms in the areas of investment, trade, and finance, initiated in response to the 1991 crisis, had helped stimulate the economy. During the period 1994- 1997, the country experienced high average rates of economic growth of 7 percent. The 1997 Country Assistance Strategy (CAS) document proposed Bank group assistance in reducing infrastructure bottlenecks and promoting private sector participation across sectors. The India Compact also called for the Bank to assist the Government to implement priorities identified in its National Environmental Action Plan (NEAP 1993), including development of the Alternative Energy Plan. At the time of project design, India's power industry was characterized by inadequate and inefficient power supply with peak capacity and energy supply shortages exceeding 20 percent and 10 percent, respectively. On the demand-side, inefficient pricing and a variety of market and non-market barriers contributed to the overall inefficient use of electricity and thermal energy, exacerbating the energy shortage and leaving a large unfulfilled market for financing investments in projects that could cost-effectively reduce energy costs in industrial units.
Energy sector measures
Energy sector support
Implementation Completion Report