India is the third largest producer of electricity in Asia with an installed capacity that has increased from 1362 MW in 1947 to about 143311 MW as of March 31 2008. However, alongside this growth story is the existence of shortages in meeting peak (16.6% in FY 08) as well as overall demand (9.8% in FY 08). In spite of the overall shortage, the inherent diversity in demand of various States and Regions in the country results in periods of seasonal surplus in one State or region coinciding with periods of deficit in another.

This coexistence of overall shortages with complementary geographical and temporal surplus-deficits provides substantial opportunities to improve the economic efficiency and security of supply through trading of power both within as well as across Regions. Realizing the full benefits of trading requires the availability of adequate transmission capacity and inter-regional links for transfer of power from a surplus to a deficit entity and support the development of a power market in the country.

To meet the challenges posed by the growing demand for power in the long-term, the role of private participation in generation projects becomes significant. Against this background, the Government of India announced the Mega Power Policy in 1998, envisioning the development of large, multi-state generation projects. One alternative for the structure of project agreements for these projects was multiple PPAs with each buyer utility, involving issues like risk sharing as well as payment security mechanisms. This structure would be within the conventional, rigid framework, reducing the credit-worthiness of the projects. The alternative was to address the issue through a single credit-enhancing entity, which would intermediate by buying power from these generation projects and sell to multiple power utilities and other buyers. Such an entity could manage the risks effectively to provide adequate comfort to investors and lenders.

PTC India Ltd. (formerly known as Power Trading Corporation of India Limited), was incorporated in 1999 to achieve the aforementioned objective, to act as an entity which could undertake trading of power to achieve economic efficiency and security of supply and to develop a vibrant power market in the country. Therefore, PTC has a tri-fold mandate; to optimally utilize the existing resources to develop a full fledged, efficient and competitive power market, to attract private investment in the Indian power sector and to encourage trade of power with neighboring countries.

A vibrant power market, which is deep and liquid, needs to be developed in the long term, and PTC would continue to play a frontrunner's role towards this objective and strive to add value to its customers' operations through providing holistic services that serve the evolving needs of the sector.