Barely a tenth of bad loans in thermal power sector resolved: ICRA

Only 10% of the 40GW of financially distressed coal power plants have been able to resolve their outstanding debt, an analysis by credit rating agency ICRA shows. Besides this, the resolution of 12 GW of gas-based capacity continues to remain uncertain, given the inadequate availability of domestic gas.

“The resolution of stressed thermal assets remains slow despite the various measures undertaken by the government and lenders, with only about 10% of the 40 GW stressed coal-based capacity achieving resolution, mainly through acquisition by a new sponsor,” the report by ICRA said. “The balance capacity is under various stages of resolution, including through Insolvency and Bankruptcy Code (IBC). In natural gas, the absence of any policy measures for use of imported R-LNG (re-gasified liquefied natural gas) with subsidy support makes the resolution for the sector uncertain.”