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NTPC to bid for stressed KSK Mahanadi thermal power project in Chhattisgarh

Sources said NTPC will be bidding for KSK as the union power ministry is pursuing government companies to pick stressed assets for both private and state-owned companies

NTPC

Shreya Jai New Delhi

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State-owned NTPC will place a bid for the stressed 1,800 megawatt (MW) KSK Mahanadi thermal power project in Chhattisgarh, official sources said. KSK Mahanadi is currently undergoing a corporate insolvency resolution process (CIRP) at the National Company Law Tribunal (NCLT).
 
The company defaulted on bank loans worth Rs 20,000 crore in 2018. The lead lender for the project is the state-owned non-banking financial corporation Power Finance Corporation Limited. Following this, the lenders initiated the debt restructuring through haircut and sale of the assets. Adani Power was one of the bidders for the project but it withdrew in 2019. The company in 2020 was then submitted to the NCLT under the Insolvency and Bankruptcy Code (IBC).
 
Sources said NTPC will be bidding for KSK as the union power ministry is pursuing government companies to pick stressed assets for both private and state-owned companies, this paper had reported. In a letter in November 2023, the Ministry of Power urged the central and state public sector power generating companies (gencos) and state power/energy departments to pick projects which are undergoing insolvency proceedings. With an eye on increasing power demand which is pushing states to scout for more electricity sources, the power ministry is looking at a quicker turnaround of these stressed plants to enhance power supply.
 
“It is requested that the state-owned gencos may be encouraged to participate in the CIRP of stressed power assets, which are of strategic and commercial significance to the capacity addition plans of the states concerned. It is pertinent to mention here that the benefit of taking the NCLT route is that the ‘clean state’ principle is embedded in the Insolvency and Bankruptcy Code (IBC), 2016,” said the November 1 advisory of the union power ministry.
 
The ministry in its advisory listed four assets, of which KSK Mahanadi was one. The project was operational and had power purchase agreements with three states – Andhra Pradesh, Tamil Nadu and Uttar Pradesh. The company defaulted due to a lack of coal supply. It was allotted two coal blocks in Chhattisgarh but following a Supreme Court judgement in 2014, the allocation was cancelled. The plant received coal linkage under the SHAKTI scheme of the Centre but had to import coal due to a shortfall.

Earlier SBI, which is one of the largest lenders to the project, tried to resolve the project under its flagship scheme SAMADHAN. It was aimed at the resolution of stressed assets outside the NCLT. However, due to the reluctance of other lenders and the lack of buyers, the process was halted and the project was moved to CIRP.

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First Published: Jan 31 2024 | 11:31 PM IST

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