- September 12, 2018
Tata and Adani Power likely to buyout two major stressed assets
Two major coal-fired stressed assets – Pragyaraj Power’s 1,980MW super-critical plant in Uttar Pradesh and GMR Infrastructure’s 1,370MW plant in Chhattisgarh – are very close to be bought out by Resurgent Power (a Tata Power-ICICI Ventures tie-up) and Adani Power, respectively. Resurgent has already received an LOI from Pragyaraj for 75.01% equity in the project.
The plants reportedly have viable fuel supply linkages and power tariffs, and the acquisitions may be one of the few to result from the restructuring of the nearly $10.5bn mess of stranded power assets.
Hike in tariffs proposed for Essar, Adani and Tata stressed assets in Gujarat
A hike in tariffs seems imminent for power from Tata, Essar and Adani Power’s coal-fired stressed assets in Gujarat – as they may be allowed to pass-through the increased cost of imported coal to their customers. The resolution plan however directly contradicts the Supreme Court’s 2017 ban on any tariff hikes for the plants and must be approved by the state’s chief minister and the cabinet.
24 stressed assets likely to face liquidation, banks request for more time to resolve NPAs
24 coal and gas-fired stressed assets are very likely to face liquidation after failing to attract any bids for buyouts. The debt-ridden projects have no reliable fuel supply linkages or power off-takers at viable tariffs.
Meanwhile State Bank of India (SBI) and Punjab National Bank (PNB) have sought additional time (beyond August 27) to resolve debt issues for 9,500MW of stressed assets that may be operationally viable. The Allahabad High Court and the Reserve Bank of India (RBI) though remain defiant on granting extensions – believing that government policies were also responsible for the heavy losses now likely to ensue for the projects’ lenders.
Major setback for climate campaigners as Norway’s pension fund may remain invested in oil & gas
The Norwegian government may have handed climate campaigners a major setback after concluding that the risks from fluctuating oil prices were too low for the nation’s $1trillion pension fund to divest its fossil fuel holdings.
The recommendation has already boosted several oil & gas stocks but has been strongly criticized for its apparent ignorance of fossil fuels’ climate impacts. The fund was advised by the country’s central bank to divest from fossil fuel holdings to shield against an anticipated global fall in consumption.