Ther­mal power projects with in­vest­ments worth `2.5 lakh crore fac­ing stress: Re­port

Millennium Post - - Mp Business -

NEW DELHI: In­vest­ments worth over Rs 2.50 lakh crore in ther­mal power projects (based on do­mes­tic coal, im­ported coal and gas) are fac­ing stress, and im­me­di­ate re­me­dial mea­sures are needed to en­sure that they are re­vived in a time-bound man­ner, as per a re­port.

The AS­SOCHAM-GRANT Thorn­ton joint study noted that the coun­try's power sec­tor has been one of the highly stressed sec­tors in re­cent times, with loans worth ap­prox­i­mately Rs 1 lakh crore hav­ing turned bad or been re­cast.

"As per the re­cent es­ti­mates, around 66,000 MW ca­pac­ity is fac­ing var­i­ous de­grees of fi­nan­cial stress, in­clud­ing 54,800 MW of coal-based power, 6,830 MW of gas-based power and 4,570 MW of hy­dropower with the lenders hav­ing an ex­po­sure of around Rs 3 lakh crore to these as­sets, which is alarm­ing, to say the least," noted the study ti­tled 'Stressed as­sets in the In­dian ther­mal power sec­tor'.

Non-avail­abil­ity of reg­u­lar fuel sup­ply ar­range­ments, lack of Power Pur­chase Agree­ments (PPAS), in­abil­ity of pro­mot­ers to in­vest eq­uity and work­ing cap­i­tal, and reg­u­la­tory and con­trac­tual is­sues are some of the ma­jor chal­lenges faced by ther­mal power projects, it said.

The re­port added that there is no univer­sal so­lu­tion for these ail­ing power as­sets and a mixed multi-pronged strat­egy needs to be adopted in­stead of a straight jack­eted ap­proach.

"This has to be done as there are not enough tak­ers for all of these stressed as­sets and any un­thought­ful ac­tion may re­sult in huge credit re­cov­ery losses for the banks/fis (fi­nan­cial in­sti­tu­tions)," it added.

While the In­sol­vency and Bank­ruptcy Code (IBC) has al­ready been amended four times since its en­act­ment in 2016, the govern­ment is will­ing to amend it fur­ther to make it stronger and ef­fec­tive. "This is con­sid­ered im­per­a­tive to pro­vide an ef­fec­tive so­lu­tion to ther­mal power projects," the re­port noted.

Fur­ther, an ef­fec­tive res­o­lu­tion in a time-bound man­ner is war­ranted by im­prov­ing the macro en­vi­ron­ment gov­ern­ing the power sec­tor, it said.

This would in­volve aug­ment­ing coal sup­plies un­der the Scheme for Har­ness­ing and Al­lo­cat­ing Koy­ala (Coal) Trans­par­ently in In­dia (SHAKTI) and medium-term/short-term power pro­cure­ment by dis­coms to al­le­vi­ate the sub-op­ti­mal plant load fac­tors (PLFS), it stated.

It would also re­quire im­prove­ment in op­er­a­tions, be­sides Na­tional In­vest­ment and In­fra­struc­ture Fund (NIIF)/NTPC led res­o­lu­tions, the study added.

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.