This is not how it was supposed to end. The script was supposed to have happy stories. How India, once a notoriously power-deficit nation, became a net exporter of power. How electricity shortage went from 4.2% (of demand) in 2014 to 0.7% in 2017. How India managed to increase its total power capacity by a third in just three years (up 31% from 243GW in March 2014 to 320 GW in March 2017) and how it achieved universal electrification, and so on.
It had nothing about profit-and-loss statements bathed in red ink or panicked bankers. Or 34 thermal power projects, representing 40 GW of capacity, going sour, jeopardising Rs 1.74 lakh crore in bank loans, becoming the principal line item in India’s terrifying bad loans problem. And yet, some of India’s top banks are staring at the spectre of taking as much as an 80% haircut in massive loans extended to power plants. And now, with India’s new bankruptcy rules and a recent central bank directive, the parties involved are also running out of time for negotiation and course correction, before they are forced into a firesale of sorts. Read more