Coal news and updates

44 GW of power projects facing time, cost overruns

India Coal Market Watch
 

December 23: Coal-based independent power producer (IPP) projects with an aggregate capacity of more than 44,000 MW and with a capital outlay of around Rs 260,000 crore are experiencing time and cost overruns due to various hurdles, Ashok Khurana, Director General, Association of Power Producers (APP), told ICMW.

The factors responsible for the time and cost overruns include delays in land acquisition, statutory clearances and approvals, fuel unavailability, transmission/off-take constraints, lack of timely financing etc, Khurana said.

He said that recent initiatives taken by the Ministry of Power, Ministry of Finance and Reserve Bank of India (RBI) would help to provide necessary regulatory support by way of revised norms for refinancing, restructuring as well as cost overrun (COR) funding.

This has helped some of the projects to get the COR funding sanctioned by the lenders, but there are others who are “still in the process.”

“However, differences between the various consortium lenders are resulting in many projects remaining stalled or progressing at a very slow pace. Consequently, this is increasing the non-performing asset (NPA) risks for the other lenders, including the lead lender with majority funding/debt exposure,” he added.