6,000 MW power projects at high risk: Survey

Nearly 46,000 MW of power projects with a loan exposure pegged at around Rs 2.1 lakh crore in the country, are at high risk as they do not have any strong sponsor company support, says an Assocham-CRISIL joint study.

Of this 46,000 MW, nearly 36,000 MW are coal-based and about 10,000 MW are gas-based, it said adding that two-thirds of around Rs 2.1 lakh crore loans to these projects are lent by public sector banks.

“Banks and Financial Institutions (FIs) have together lent about Rs 75,000 crore as on March 15, 2015 and these projects are not expected to turn viable in the long-run even if they are structured under the 5/25 scheme,” the study said.

“It is rather apprehended that accretion of non-performing assets (NPAs) from these accounts could be high in the medium term,” it added.

The study has classified coal-based projects (76 per cent of the Rs 2.1 lakh crore exposure) into three buckets of risk – offtake, fuel availability, and aggressive bidding.

The risk is highest where lenders are exposed to projects that were bid so aggressively that there is a question mark over their viability. Gas-based projects (24 per cent of the exposure), on the other hand, are weak due to the lack of fuel availability, the study revealed.

“Nearly 20,000 MW of weak generation projects involving debt of Rs 1 lakh crore can benefit from the 5/25 scheme in the medium-term. Of this 15,000 MW are coal-based,” it said.

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