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Stressed assets to be made national assets

Banks need assistance to complete projects that they have taken over

Shreya Jai  |  New Delhi 

Data from Uday website show reduction of 4.03 percentage points in aggregate technical and commercial losses in three months as on December 31, 2016. This suggests government may have already achieved its 2018-19 target of reducing losses to 15%
Lack of power demand has hit most of the projects

In a concentrated effort to bail out beleaguered thermal projects, the Centre is designing a new plan along with banks and the state-owned For stressed power-generating assets which a bank agrees to take over, has offered to operate them, Minister told reporters after a daylong meeting with leading bankers.

Banks need assistance to complete projects that they have taken over, the minister of state for coal, power, mines, new & renewable energy said, adding, “We are focused on finding solutions to make stressed assets into national assets.”

While the government has tried to assist thermal projects with a new coal linkage policy, it will step up its efforts by offering last-mile equity to some projects. The policy would also cover the projects which are old and are planning to retrofit to meet the current environmental norms.

About 25,000-Mw capacity in thermal is on sale, Business Standard reported recently. But as finding buyers is posing a challenge, most promoter companies of the projects — some operational and others still under development — want to exit to lighten their debt.

In some cases, the companies are undergoing asset restructuring, while others are at various levels of the Reserve Bank of India’s S4A scheme, for restructuring of stressed assets, an institutional financier said.

Sources said the projects in question are “ready to be fired up” but no state distribution company was floating tenders for additional procurement. To add to the woes, banks are concerned about non-performing assets (NPAs) increasing.

Lack of demand has hit most of the projects. Experts said till the end of 2022, new private investment was unlikely. Demand projection has not been in line with capacity addition, leaving close to 60,000 Mw of under-construction projects looking at a bleak future. Recently, the sector’s key financier, Finance Corporation, reported losses for the first time as its NPAs rose 300 per cent.

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Stressed assets to be made national assets

Banks need assistance to complete projects that they have taken over

Banks need assistance to complete projects that they have taken over
In a concentrated effort to bail out beleaguered thermal projects, the Centre is designing a new plan along with banks and the state-owned For stressed power-generating assets which a bank agrees to take over, has offered to operate them, Minister told reporters after a daylong meeting with leading bankers.

Banks need assistance to complete projects that they have taken over, the minister of state for coal, power, mines, new & renewable energy said, adding, “We are focused on finding solutions to make stressed assets into national assets.”

While the government has tried to assist thermal projects with a new coal linkage policy, it will step up its efforts by offering last-mile equity to some projects. The policy would also cover the projects which are old and are planning to retrofit to meet the current environmental norms.

About 25,000-Mw capacity in thermal is on sale, Business Standard reported recently. But as finding buyers is posing a challenge, most promoter companies of the projects — some operational and others still under development — want to exit to lighten their debt.

In some cases, the companies are undergoing asset restructuring, while others are at various levels of the Reserve Bank of India’s S4A scheme, for restructuring of stressed assets, an institutional financier said.

Sources said the projects in question are “ready to be fired up” but no state distribution company was floating tenders for additional procurement. To add to the woes, banks are concerned about non-performing assets (NPAs) increasing.

Lack of demand has hit most of the projects. Experts said till the end of 2022, new private investment was unlikely. Demand projection has not been in line with capacity addition, leaving close to 60,000 Mw of under-construction projects looking at a bleak future. Recently, the sector’s key financier, Finance Corporation, reported losses for the first time as its NPAs rose 300 per cent.
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Business Standard
177 22

Stressed assets to be made national assets

Banks need assistance to complete projects that they have taken over

In a concentrated effort to bail out beleaguered thermal projects, the Centre is designing a new plan along with banks and the state-owned For stressed power-generating assets which a bank agrees to take over, has offered to operate them, Minister told reporters after a daylong meeting with leading bankers.

Banks need assistance to complete projects that they have taken over, the minister of state for coal, power, mines, new & renewable energy said, adding, “We are focused on finding solutions to make stressed assets into national assets.”

While the government has tried to assist thermal projects with a new coal linkage policy, it will step up its efforts by offering last-mile equity to some projects. The policy would also cover the projects which are old and are planning to retrofit to meet the current environmental norms.

About 25,000-Mw capacity in thermal is on sale, Business Standard reported recently. But as finding buyers is posing a challenge, most promoter companies of the projects — some operational and others still under development — want to exit to lighten their debt.

In some cases, the companies are undergoing asset restructuring, while others are at various levels of the Reserve Bank of India’s S4A scheme, for restructuring of stressed assets, an institutional financier said.

Sources said the projects in question are “ready to be fired up” but no state distribution company was floating tenders for additional procurement. To add to the woes, banks are concerned about non-performing assets (NPAs) increasing.

Lack of demand has hit most of the projects. Experts said till the end of 2022, new private investment was unlikely. Demand projection has not been in line with capacity addition, leaving close to 60,000 Mw of under-construction projects looking at a bleak future. Recently, the sector’s key financier, Finance Corporation, reported losses for the first time as its NPAs rose 300 per cent.

image
Business Standard
177 22