Mumbai Shortage of domestic coal, coupled with high cost of imports and delays in receiving approvals, are pushing Indian power producers to build plants overseas or bid for them. India's largest private power producer Tata Power is now evaluating Vietnam, Indonesia, Turkey, Africa and West Asia to build coal, gas and hydropower projects. “For a large corporation like Tata Power, if it finds its growth stunted in India, it needs to look out,” S Ramakrishnan, executive director, Tata Power told FE in a recent interview. “Also, it is always good to diversify your portfolio, so that it is not exposed to one country, one policy and so on.” Tata Power is also looking to expand its renewable energy capacity. Tata Power, now, has partnered with Royal Government of Bhutan's Druk Power Company to build a 114 MW Dagachhu Hydro Project, Norway’s SN Power to build a 600 mw Tamakoshi-3 hydro project in Nepal and a venture with Australian Origin Energy to build a 240 MW geothermal project in Indonesia. Domestic coal shortage has been rising with India's largest coal miner Coal India Ltd unable to supply enough coal to power producers. Coal rich countries like Indonesia and Australia have hiked royalties for exports making coal imports expensive and domestic producers are caught in a bind as state electricity boards, the buyers, refuse to increase tariffs. Indian coal production is expected to increase by 11% to 442 million tonne per annum or mtpa in 2012 against 397 mtpa in 2009, according to Ministry of Coal data sourced by ratings agency Crisil. In 2012, India is expected to import 110 mtpa of coal, roughly 3 times more than in 2009 at 38 mtpa. Adani Power, the Gautam Adani promoted company has been shortlisted by Nigeria to expand two power plants — a 972 mw Ughelli Power and 1,020 mw Sapele Power. Roughly 6,500 MW are at various stages of bidding in overseas countries. In May 2012, quoting Central Statistics Office, Crisil said that in 2004-05, energy-related expenses accounted for about 10% of the average Indian urban household’s monthly expenditure. However, in 2009-10, it dropped to about 8%, the first time in the last 20 years. Many power plants are hit by coal shortages. Anywhere between 10,000 MW to 15,000 MW of coal fired power projects are affected. "Overseas markets like Indonesia, Nigeria, Mauritius, Kenya and African regions have recently started looking at private participation in power, which definitely throws opportunity for Indian companies," says Seshan Balakrishnan, director (infrastructure practice), Ernst & Young India. But, there are challenges too. "For big Indian conglomerates who already have business presence in these areas understanding the market in terms of socio-political issues, regulatory framework, etc, will not be difficult. But it will not be the case for all," he says. "Given that there is substantial over dependence on the Indian market and with the risks that it involves with the ongoing issues of fuel shortage and high prices of imported coal etc, companies will be looking at opportunities to expand abroad," says Shubhranshu Patnaik, senior director, Deloitte India. In terms of funding the projects too, it will be a rough terrain ahead as Patnaik puts it- "Some of these countries which have opened their markets for private players participation in their power generation and distribution network do not have a good credit rating, which will make cost of borrowing high."