The move is aimed at expediting the setting up of the Power Trading Corporation (PTC). Disclosing this to The Financial Express, union power minister PR Kumaramangalam said that the committee will work in close co-ordination with the standing independent group (SIG) and work out an appropriate security cover to make the operations of the PTC viable.

The SIG, headed by Justice PN Bhagwati, is currently looking into the setting up of mega power projects and is also formulating the norms for setting up the PTC.

The proposed inter-ministerial committee will consist of top brass from leading financial institutions along with power experts and senior officials from the power ministry.

"The power producers will sellpower to the PTC and will be isolated from the risks involved in supplying power to the states. However, the government still has to ensure timely payments to the PTC. Therefore, appropriate clauses relating to timely payments have to be incorporated in the power purchase agreements (PPAs) signed by the PTC with the power developers. The inter-ministerial committee will assist the SIG on the securitisation of these PPAs and make them bankable," the minister added.

The mega power policy, according to the minister, will be announced once this security cover is worked out.

The SIG had earlier worked out the concept of `power bonds' for ensuring timely payments to the project developers. However, following opposition from a host of states, the government is working out an alternative strategy in order to recover dues from the SEBs. Recovering dues from the state's annual plan assistance was one such alternative.

The inter-ministerial group will, along with SIG, look into these possibilities and come outwith a viable model for the formation of the PTC, the minister said.

The government has also identified a host of mega power projects, with capacities ranging from 1,000mw to 2,000mw. These projects, which will use imported coal and LNG, will come up at Cudallore, Tuticorin, Krishnapatnam, Pipavav, Jamnagar, Khelgaon and North Karanpura.

Power from these mega power projects will be sold by the developers to the proposed PTC which, in turn, will sell the power to the various SEBs. The proposal for setting up a PTC will be shortly sent to the cabinet for its approval.

The PTC will initially have equity contributions from the central power sector undertakings like Power Grid Corporation of India Ltd (PGCIL), National Thermal Power Corporation, Infrastructure Development Finance Corporation (IDFC) and financial institutions.