Financial institutions are in the process of selling off power plants of aggregate capacity of 6,500 megawatt (MW) even as the government is looking to assuage the stress in the power sector.
The finance minister Piyush Goyal met some power firms on Wednesday to discuss stress in the sector.
Bankers are looking to sell the plants as promoters have failed to pay up the loans taken for the projects which are mostly suffering from operational issues, including absence of power purchase pacts.
The latest project put up for sale is Coastal Energen Pvt Ltd, currently operating a 1,200 mw coal-based thermal power plant in Tuticorin, Tamil Nadu.
Despite earning a revenue of Rs 1,880 crore in FY17, the promoters failed to service the debt and the consortium of lenders led by State Bank of India (18.45% share) took control of 51% stake in the company promoted by Mutiara Energy Holdings of Mauritius and Precious Energy Holdings, a Dubai-based energy conglomerate.
“The company has been facing challenges due to non-availability of power purchase agreements at remunerative tariffs and consequently has not been able to service its obligations under the credit facilities provided by the lenders,” SBI said while inviting expressions of interest from bidders.
IDFC Bank along with consortium partners is looking at identifying a strategic investor for a 1,050 MW plant in Odisha. The lenders plan to sell least 51% equity stake in the company.
State Bank of India has also put on the block SKS Power Generation (Chhattisgarh) Ltd’s 4X300 mw coal-based power plant in Raigarh in Chhattisgarh, of which first 300 mw of capacity was started in October while the second unit started in April.
One of the largest projects on the block is a 3,600 mw power plant of KSK Mahanadi Power put up for sale by Power Finance Corp, which is selling to a strategic the ownership control of the company on behalf of consortium members.
Out of the total capacity of the project in Chhattisgarh promoted by holding company KSK Energy, 1,800 mw capacity has been commissioned and the balance 1,800 mw is under implementation.