Independent power producers (IPPs) will meet Reserve Bank of India governor Raghuram Rajan on Friday this week to present their case on the financing of power projects that are stuck due to various reasons.
Earlier this month, a panel of bankers led by IIFCL chairman Santosh Nayyar submitted a report to the financial services secretary to suggest ways to sort out financing issues to these projects.
“We hope that the RBI will allow debt restructuring for stuck projects as these cannot be allowed to turn into NPAs, considering the amount of exposure banks have. The fuel supply situation may also be moving towards more certain regime and that could help our case,” an independent power producer told FE on the condition of anonymity.
There are certain issues that the IPPs will discuss as there are constraints that the banks are facing such as viability, extra funding and debt restructuring. As much as 1,00,000 MW of coal- and gas-based power projects are suffering due to raw material shortage and have been facing time and cost overruns.
The banks’ exposure to these projects is nearly R5 lakh crore. SBI has an exposure of R92,919 crore — close to 10% of the total loan portfolio. Out of the total infrastructure loan of R1,53,136 crore, the sector has a 61% share at R92,919 crore.