The Andhra Pradesh government’s move to review and cut the purchase cost of wind and solar energy could stress 5.2-GW renewables projects with estimated debt exposure of over Rs 21,000 crore,” Crisil said on Tuesday. The move could also aggravate the problem of delayed payments from distribution companies (discoms), it said.
According to the agency’s statement, nearly half of this 5.2-GW capacity is at higher risk of default since they lack liquidity support beyond project level. “The order, issued on July 1, 2019, directs a high-level negotiation committee to use current rates, rates prevalent at the time of commissioning of projects, and the current opportunity cost of other sources of power to benchmark and renegotiate agreements, and also submit its report to the state in 45 days,”it stated.
