New Delhi, Sep 10 - The government Thursday said there is a shortfall of about Rs.500,000 crore for financing power projects in the country, a prime reason for slow pace of capacity addition.

'The power sector as a whole requires a huge investment and there is a gap of around Rs.500,000 crore in financing the power generation capacity addition projects,' said Minister of State for Power Bharatsinh Solanki here.

'The exposure limit of banks and financial institutions for financing power sector companies should be increased,' Solanki said at an energy conference organised by the Federation of Indian Chambers of Commerce and Industry.

Additionally, the minister suggested, the external commercial borrowing by financial institutions like Power Finance Corp and Rural Electrification Corp could also be brought under the automatic route that does not require the approval of the Reserve Bank of India.

According to Solanki, India can achieve 350 GW (Gigawatt) of power generation target by 2017 on 27,000 MW (Megawatt) of capacity addition annually.