Odisha may attract Rs 25,000-30,000 cr in power investments after policy shift
GST
Dated:- 26-5-2026
PTI
Bhubaneswar, May 26 (PTI) Odisha could attract investments worth Rs 25,000-30,000 crore in the power sector over the next six to 12 months after the state moved to align with the Centre's policy on concessional power allocation from thermal plants, an industry body official said.
The state government is set to mandate the supply of 5 per cent of capacity from newly commissioned thermal power plants at variable charges, replacing its earlier policy that required developers to allocate 12-14 per cent of capacity at concessional rates for state consumption.
Industry executives said the earlier policy had discouraged fresh investments despite Odisha's abundant coal reserves and strategic advantages, including port access and skilled manpower availability.
Odisha has all the enabling factors for power sector growth, but the higher mandatory allocation of power at var
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such as Jindal Power, Vedanta, and Adani evaluating opportunities in the state.
According to the industry body, the policy divergence led investors to favour neighbouring Chhattisgarh, which attracted over Rs 1.5 lakh crore in thermal power investments and added more than 16 GW of capacity over the past decade. Odisha, by comparison, saw less than 4 GW of new capacity and investments below Rs 40,000 crore.
Companies, including Jindal Power, Vedanta and Adani Group, are now evaluating investment opportunities in the state, Keshari said.
He said rising project costs had made the earlier concessional supply obligations increasingly burdensome. Thermal power project costs have risen to around Rs 15 crore per MW from about Rs 5 crore earlier, pushing fixed costs to nearly Rs 4 per unit from around Re 1 previously.
As a result, the tariff impact on other consumers from concessional supply obligations has increased to about 55 paise per unit from roughly 14 paise earlier, affectin
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key power investment destination,” he said.
Explaining the financial implications of the earlier policy, Keshari said that thermal power project costs have sharply escalated – from around Rs 5 crore per MW earlier to nearly Rs 15 crore today. Consequently, fixed costs have risen from approximately Re 1 per unit to nearly Rs 4. Under the earlier framework, concessional supply obligations led to a marginal tariff impact of around 14 paise per unit for other consumers. However, at current capital costs, this impact increases significantly to about 55 paise per unit, affecting project viability.
Addressing concerns over potential revenue loss to the state due to its moving to a 5 per cent slab, Keshari described such apprehensions as largely notional.
“In the absence of investment, there is no revenue foregone. Moreover, even with the shift to a 5 per cent allocation, the state's actual receivables remain broadly unchanged given the increase in fixed costs,” he said.
He furthe
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