Company sources said banks were ready to finance the “war chest” that NTPC would use to bid for projects NCLT. NTPC will only participate in bidding held under IBC. Executives said the company will follow strict criteria for shortlisting assets for bidding.
“We are looking at projects which have any kind of coal supply stream, robust infrastructure built by noted contractor, land and allied clearances and in either operational or about to be operated state,” said a senior company executive requesting anonymity. Lack of power purchase agreement (PPA) with the project is not a hindrance as NTPC would be able to facilitate power sale, said a senior executive.
“NTPC would either pursue states to sign long term PPA (25 years), or sell through medium-term contracts through central agencies. If nothing, we can also use these units for selling power in merchant or spot market,” he said
NTPC had earlier shortlisted 10,000 Mw of capacity which matched its criteria. It had also issued a tender to purchase stressed assets and received interest from four companies. As per sources, it didn’t reach closure due to issues around the “valuation of a project”.
Jhabua is in the list of close to 40 stressed thermal power units that are deemed to become non-profitable assets (NPAs). Earlier efforts to sell the Jhabua power plant did not yield any results. Its sale deal with Goyal MG Gases also fell through.
Jhabua commissioned in 2016 is located in Madhya Pradesh. Of the planned 1,200 Mw, only one unit of 600 MW was commissioned. The coal source for the plant was tied up with Mahanadi Coalfields and South-Eastern Coalfields. The plant has been operating at below optimum capacity. Earlier it was due to low demand from its beneficiary states Madhya Pradesh and Kerela. Later the parent company did not infuse required working capital and the plant also faced coal supply crunch. The project is Rs 4,800 crore and has debt of Rs 3,488 crore.