46,000 MW Indian power projects not viable

Around 46,000 MW capacity worth power projects may never see the light of the day due to lack of long-term purchase agreements, inadequate fuel supply and aggressive bidding to win projects, a Crisil report said.

Around 36,000 MW of the total 46,000 MW are coal-based projects where tariff under-recovery has impacted 20,000 MW projects, while the rest are suffering from inadequate feedstock and poor electricity off-take. The remaining 10,000 MW of gas-based projects are unviable because of dwindling fuel supplies from the Krishna-Godavari basin.

"Total loans to these stressed generation projects are currently about Rs 2.1 lakh crore. A sixth of it, or about Rs 35,000 crore, is for projects which have the cushion of a strong parent.”, Pawan Agrawal, Chief Analytical Officer, Crisil Ratings said.

"Additionally, projects with loans of Rs 1 lakh crore could become viable if their payment profiles can be structured appropriately. This leaves the remaining Rs 75,000 crore of loans at risk," he added.

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