New Delhi, Dec 28 (IANS) The power ministry would soon come out with a new policy to promote private investment in the power sector in areas which are either remote or affected by insurgency, Power Minister Sushil Kumar Shinde said here Thursday.

"If any independent power producer will go to such a place which is remote or affected by insurgency, there should be something which should encourage them to go there," he said after handing over letters of intent for two ultra mega power projects.

The two projects have a capacity of about 4,000 MW each. Gloeleq Singapore and Lanco Infratech will jointly execute the contract for Sasan (Madhya Pradesh) power project while the letter of intent for Mundra (Gujarat) power project was handed over to Tata Power Company Limited.

The power minister stressed the need to tap the potential of hydropower in India. "We are introducing certain policy changes to fuel the growth of hydropower projects," Shinde said.

"India has the potential to generate 150,000 MW of power through hydro power projects but so far we have hardly realised about 28 to 30 percent of this potential," he added.

Speaking on the occasion, Planning Commission deputy chairman Montek Singh Ahluwalia said private investment is going to play a crucial role in the growth of power sector.

"Power is one of those sectors where private investment can be brought in if right kind of conditions are created," he said.

"The strategy of competitive bidding could ensure transparency and lower power tariff when it comes to attracting private investment for power projects," Ahluwalia added.

He hoped several more projects would come up with the help of private investment to generate enough power needed for achieving a growth rate of 9 percent during the 11th Five-Year Plan (2007-12).