Govt Initiates Steps To Ease Stress In Stalled Thermal Power Projects

As per DFS data, the total advances towards electricity generation sector reported by Scheduled Commercial Banks (SCBs) is about Rs. 4.71 lakh crore and most of them are standard assets.

Govt Initiates Steps To Ease Stress In Stalled Thermal Power Projects
Team EnergyInfraPost 
Union Minister of State (IC) for Power, Coal, New & Renewable Energy and Mines, Mr Piyush Goyal informed the Upper House of the Parliament (Rajya Sabha) that Government has reviewed the status of 34 stressed Thermal Power Projects, as per the list provided by Department of Financial Services (DFS), with an estimated debt of about
Rs. 1.77 lakh crore
The Minister also informed that as per DFS data, the total advances towards electricity generation sector reported by Scheduled Commercial Banks (SCBs) is about Rs. 4.71 lakh crore and most of them are standard assets.

Mr Goyal stated that Neyveli Lignite Corporation of India Limited (NLCIL) has identified Ragunathpur Thermal Power StationPhaseI (2×660 MW), a stressed asset of Damodar Valley Corporation (DVC) for acquisition.

Alongside, NLC has also shortlisted two suitable stressed power assets for possible acquisition to augment its power generation capacity

Currently, NTPC has no proposal to acquire stressed power projects or enable their lenders to operate on contract basis, the Minister added.

The minister listed the major reasons for stress in the Power Sector, as identified by the government. These includes:

·         Nonavailability of regular fuel supply arrangements

·         Lack of Power Purchase Agreement (PPA) tieups

·         Inability of the Promoter to infuse the equity and service debt

·         Regulatory and Contractual issues

Mr Goyal informed that the Government has also taken a number of steps to ease stress in the sector.

These include:

Ø  For grant of regular coal linkages, Govt. of India has approved New Coal Allocation Policy, 2017, for Power sector, on 17.05.2017 viz. SHAKTI (Scheme for Harnessing and Allocating Koyala Transparently in India) under which coal is made available to Public Sector Undertakings of Central and State Government, and Independent Power Producers (IPPs) against already concluded longterm Power Purchase Agreements (PPAs) and longterm & mediumterm PPAs, to be concluded in future.

Ø  To encourage increased purchase of Power, following measures have been taken:

·         Ujwal DISCOM Assurance Yojana (UDAY) scheme for Financial and Operational Turnaround of power distribution utilities (DISCOMs) of the country.

·         Power For All (PFA) initiative with States and UTs for bringing uninterrupted quality of power to each household, industry, commercial business, small & medium enterprise and establishment.

·         Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY) for Rural Electrification; strengthening of subtransmission and distribution networks in the rural areas; separation of agriculture and nonagriculture feeders and metering of distribution transformers/ feeders/consumers in the rural areas.

·         Integrated Power Development Scheme (IPDS) for strengthening of subtransmission and distribution networks in the urban areas; Metering of distribution transformers / feeders / consumers in the urban areas and IT enablement of distribution sector.

·         Augmenting Transmission capacity to remove transmission constraints.

·         Flexibility in utilization of domestic coal for reducing the cost of power generation.

Mr Goyal also informed that RBI has notified schemes such as

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(i) Scheme for Sustainable Structuring of Stressed Assets(S4A) and

(ii) Strategic Debt Restructuring Scheme (SDR) for the revival of stressed assets.

Due diligence and financial restructuring by Banks to make projects viable would attract new promoters or States to bring in fresh equity investments. The issue of setting up of a fund has been discussed among other options with stakeholders, he added.

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