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India Mulls Operating Stressed Coal Plants Via State-Run Firms

India is considering operating about 40 gigawatts of stressed coal-fired plants through state-run power companies.

India Mulls Operating Stressed Coal Plants Via State-Run Firms
Coal is stored at a port. (Photographer: Victor J. Blue/Bloomberg)

(Bloomberg) -- India is considering operating about 40 gigawatts of stressed coal-fired plants through state-run power companies, power minister R.K. Singh said Monday.

The proposal to run the projects through a special-purpose vehicle formed by state-run NTPC Ltd., Power Finance Corp. and Rural Electrification Corp. aims to make them economically viable for eventual sale.

Identified stressed plants may get power-purchase agreements for nearly 40-50 percent capacity and the rest may need to be sold on the spot market, Singh said in New Delhi.

A recent revision of loan repayment norms for stressed power assets may push 75 gigawatts of projects that are facing financial problems toward bankruptcy, according to a letter written by industry lobby group Association of Power Producers to Reserve Bank of India Governor Urjit Patel earlier this month.

--With assistance from Rajesh Kumar Singh

To contact the reporter on this story: Anindya Upadhyay in New Delhi at aupadhyay22@bloomberg.net.

To contact the editors responsible for this story: Ramsey Al-Rikabi at ralrikabi@bloomberg.net, Abhay Singh, Unni Krishnan

©2018 Bloomberg L.P.