Escrow facility which has been one of the major criteria for financing power projects was only atemporary mechanism and not all the projects can be given this comfort as the state electricity boards do not have a capacity to provide escrow cover to all the projects. Unless SEB's become financially viable, funding of power projects will remain difficult, he said.

This requires implementations of power sector reforms. The Centre had earlier passed an Act paving way for the states to set up Electricity Regulatory Commissions and some of the states have already set up these commissions but unless these organisations are given actual power the purpose of having a regulatory body will not be achieved.

Even for other sectors these regulators should be allowed to take decisions independently on all important issues, including tariff, working of licensees and policies. They should also have powers for disputes settlement.

Speaking on power projects financing, chairman and managing director of BSES, RV Shahi, said the developer and lenders must come forward with a positive attitude. Risk perception shouldbe genuine, he said, adding that lenders demand risk cover for everything. This not only makes financing difficult but also makes the product expensive.

The developers also have to show confidence in their projects which in turn will give assurance to the lenders, he said.

For the slow growth in the development of infrastructure sector, Khan said that this is not because of shortage of funds but due to lack of political will. "Free the telecom sector and let the companies compete to give best services at the cheapest cost," he said.