There is plan for power sector which comes from an REC-PFC combine called Parivartan, this plan lists 16 power companies that are good plants except that they don’t have a power purchase agreement (PPA) or a fuel supply agreement (FSA). REC says if they are auctioned in the market today they won’t even fetch 1 crore per megawatt. So banks should create a special purpose vehicle (SPV) and push these assets at net book value to this SPV, which can in turn sell these plants when the market improves. After all as demand improves new PPAs will be signed.
So is this plan good to save some of the companies from being dragged to NCLT? To answer this Latha Venkatesh is joined by PV Ramesh of REC.
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