 "Banks might seek special dispensation on loans to gas-fed power projects")
After months of stress, lenders to gas-based power plants are considering asking the Reserve Bank of India (RBI) for a special dispensation.
Some of the likely terms would include fixing fresh commercial dates of operation for projects hit by uncertainty. Lenders are also looking for relaxations in provisions for debt restructuring, apart from exemption from terming accounts as non-performing assets. “Finally, it depends on what stance the banking regulator takes,” a banker said.
Various lenders, including public sector banks (PSBs) such as State Bank of India, IDBI Bank and Punjab National Bank, have exposures of as much as Rs 25,000 crore to the sector.
Infrastructure companies that have gas-based power projects include GMR, GVK, Lanco, Sravanthi Power and China Light & Power India. Konaseema Gas, which runs a 460-Mw power unit, is already in the process of corporate debt restructuring of about Rs 1,400 crore.
Gas-based projects in different stages of uncertainty can be classified into three categories. First, existing and operational projects with capacities exceeding 2,000 Mw. Second, projects that have been completed but aren’t operational due to lack of clarity on gas supply. This category has about 3,000 Mw, mostly expansion projects. In the third category are projects that are partly implemented and are now stuck (about 1,500 Mw). Lenders to these projects had stopped dispersing money after the fuel supply environment turned bleak.
Lanco Infratech, which recently restructured its assets (primarily from its engineering, procurement and construction division), said it was looking at a turnaround for this business and its coal-based power plants by March. But its gas-based power projects still stare at uncertainty. “We don’t see any visibility on gas-based assets at least for the next one year,” said Chief Financial Officer Adi Babu after lenders approved its Rs 7,700-crore restructuring package.
Some of the likely terms would include fixing fresh commercial dates of operation for projects hit by uncertainty. Lenders are also looking for relaxations in provisions for debt restructuring, apart from exemption from terming accounts as non-performing assets. “Finally, it depends on what stance the banking regulator takes,” a banker said.
Various lenders, including public sector banks (PSBs) such as State Bank of India, IDBI Bank and Punjab National Bank, have exposures of as much as Rs 25,000 crore to the sector.
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Faced with lack of fuel supply, gas-based power projects across the country have shut operations since April. Generation capacity of about 7,000 Mw, across 11 projects, has been stranded since supply from the Krishna-Godavari basin dried up. “This is a factor external to a company or a unit; it is an industry-wide problem. This could be grounds for seeking special dispensation,” a senior PSB executive said on condition of anonymity.
Infrastructure companies that have gas-based power projects include GMR, GVK, Lanco, Sravanthi Power and China Light & Power India. Konaseema Gas, which runs a 460-Mw power unit, is already in the process of corporate debt restructuring of about Rs 1,400 crore.
Gas-based projects in different stages of uncertainty can be classified into three categories. First, existing and operational projects with capacities exceeding 2,000 Mw. Second, projects that have been completed but aren’t operational due to lack of clarity on gas supply. This category has about 3,000 Mw, mostly expansion projects. In the third category are projects that are partly implemented and are now stuck (about 1,500 Mw). Lenders to these projects had stopped dispersing money after the fuel supply environment turned bleak.
Lanco Infratech, which recently restructured its assets (primarily from its engineering, procurement and construction division), said it was looking at a turnaround for this business and its coal-based power plants by March. But its gas-based power projects still stare at uncertainty. “We don’t see any visibility on gas-based assets at least for the next one year,” said Chief Financial Officer Adi Babu after lenders approved its Rs 7,700-crore restructuring package.