Panel formed to solve the issue of NPAs in power sector

01 Jan 2018 CW Staff

According to a source in the Ministry of Power, the government recently set up a high-profile panel, chaired by Amitabh Kant, CEO, NITI Aayog, to cater to the issue of stressed assets in the power sector. As per the Economic Survey 2016-17 released in August, non-performing assets (NPAs) in the area of power generation share 5.9 per cent of the overall outstanding advances of Rs 4.73 trillion in the banking sector. A source from NITI Aayog, on condition of anonymity, shared with CW, 'The projects were initially identified by the financial services. The government has reviewed 34 coal-fuelled projects, resulting in an estimated debt of Rs 1.77 trillion. This will also avoid a further debt of Rs 80,000 crore that could result from the NPAs.' Speaking about the cause of the delay, the source pointed out to issues such as demonetisation, GST, lack of funds, lack of coal supply and the absence of fuel security. The panel is also expected to bring in a channelised method for power projects that will provide relief for the banks affected owing to bad loans. The panel, comprising secretaries from the ministries of power and coal and the department of financial services, will also keep a tab on wilful defaulters and take necessary action. Because of weak financial health, only a mere 1.64 gw of projects were tied up through power-purchase agreements. The panel is looking at long-term loans and PPAs to solve the issue of the 60 gw of stressed assets across fuel sources. 'We are looking at ways to find solutions,' says Kant. When asked about the issues the sector is facing, he refrained from further comment.

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