There is renewed nervousness among banks that lending to renewable power utilities and telecom companies over the last five years may turn bad.
Payment dues of renewable energy generators are mounting, primarily as distribution companies (discoms) of states such as Andhra Pradesh, Tamil Nadu and Telangana have been falling back on payments for electricity contracted. The dues were pegged at close to Rs 10,000 crore upto July 31, 2019, according to data compiled by the Central Electricity Authority, and the amount is piling up.
Delays have started to stretch beyond 12 months in some cases, effectively impeding the working capital flows for these companies and hindering their debt servicing capability — a warning sign for lenders. In all, over 15 discoms have fallen back on their payment obligations against electricity supplied by solar and wind energy developers — the only bright spark in an otherwise sluggish electricity sector.
