Power projects of 46,000 MW are currently facing viability issues due to lack of long term buyers for electricity, inadequate fuel supply and aggressive bidding to win projects and coal blocks. Of this, 36,000 MW are coal-based within which tariff under recovery has impacted 20,000 MW of capacities, while the rest are reeling because of inadequate feedstock and poor electricity off take by distribution companies (discoms). Further, 10,000 MW of gas-based projects have become unviable due to dwindling fuel supplies from the Krishna Godavari basin.
CRISIL Ratings in its report titled “Current Worries”, which was released today said loans of Rs 75,000 crore are at risk if issues are not sorted out soon.
CRISIL Ratings chief analyst officer Pawan Agarwal said: “Total loans to these stressed generation projects are currently Rs 2.1 lakh crore. A sixth of it, or about Rs 35,000 crore, is for projects which have the cushion of a strong parent. Additionally, projects with loans of Rs 1 lakh crore could become viable if their payment profiles can be structured appropriately. This leaves the remaining Rs 75,000 crore of loans at risk.”
Another Rs 1.9 lakh crore debt is owed by weak discoms for which moratorium on principal repayment based on a financial restructuring package announced in 2012 and new in the current and next fiscal. Till date, government support has prevented these discoms from turning weak. The assurance of continuing financial support is necessary, else this debt too can be at risk.
