At a time when the Power Ministry is struggling to achieve revised capacity addition target for the XI Plan, a report has warned that continued coal shortages and environment hurdles could lead to ‘major default' in loans by private power producers to the tune of Rs.1.35-lakh crore.
According to a report prepared by Britain-based International Energy Consultancy, Mercados Energy Markets India for Association of Power Producers (APP), the banking sector has an exposure of about Rs.2,92,342 crore to the power sector. The APP includes big time companies such as Reliance Power, Tata Power, Essar Power and Adani Power.
Already a cloud of uncertainty hangs over the capacity addition target for the XI Plan target. The target has been revised from 78,000 MW to 62,000 MW but the Government is still struggling to achieve that. Already the Government is talking about 50,000 MW capacity addition in the XI Plan.
Taking forward the concerns of the government, the report notes that the shadow of acute coal shortage is looming large on the power sector. This could lead to a severe risk of stranding of assets and the associated contracts.
