The Government of India has been mulling to introduce a new policy wherein stressed assets mostly in the category of thermal power production would be made national assets. This is considered in order to bail out the debt reeling companies. The plan is being devised along with the banks and the Govt owned National Thermal Power Corporation(NTPC).
For stressed power-generating assets which a bank agrees to take over, NTPC has offered to operate them, Power Minister Piyush Goyal said. He added “We are focused on finding solutions to make stressed assets into national assets.”
The policy is not only applicable for the new projects but also for the which are old and are planning to retrofit to meet the current environmental norms. At the present moment, restructuring is in existence where the debt-ridden companies go for Reserve Bank of India’s S4A scheme for restructuring.
At the present scenario, about 25,000-Mw capacity in thermal power is on sale but finding buyers is a major problem since most of the major players wanted to keep their debt under control which adds to the increase in the Non Performing Assets(NPAs) for the banks.
Lack of power demand has hit most of the projects. Demand projection has not been in line with capacity addition, leaving close to 60,000 Mw of under-construction projects having not so bright opportunity in the immediate future.
It is to be noted that Power Finance Corporation, reported losses for the first time as its NPAs rose 300 per cent which is a worrying factor for the government.