Workers connect electricity cables to a transmission pole. (Photographer: Prashanth Vishwanathan/Bloomberg)

Stressed Power Projects: Finance Minister Holds Review Meeting With Lenders

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Finance Minister Arun Jaitley today held a review meeting with lenders and senior officials on the financial stress faced by some of the power projects, including that of Tata Power Company Ltd. and Adani Group in Gujarat.

The high-level meeting was also attended by Principal Secretary to the Prime Minister Nripendra Misra, senior officials of power ministry, SBI chairman Rajnish Kumar, among others, sources said.

Tata Power last year offered to sell 51 percent stake in its 4,000 MW Mundra power project for Re 1 to states like Gujarat, which gets electricity from it, to tide over the financial crisis facing this business. Besides, there were allegations that Adani Group charging exorbitant electricity tariff in Gujarat.

Also Read: How Easy Will It Be For The Government To Restructure Power Assets?

However, the company refuted the charges saying it sold power to the state at a "very attractive" price of Rs 2.65 per unit over the last four years.

Coastal Gujarat Power Ltd., the Tata Power unit which operates the Mundra project, wrote to Gujarat Urja Vikas Nigam Ltd offering to retain only 49 percent stake and operate the project as a contractor provided the procurers buy all the power at higher tariffs.

In the letter, copies of which were marked to the principal secretary to the prime minister and Union power secretary, Krishna Kumar Sharma, chief executive officer at CGPL said Mundra has accumulated losses of Rs 6,457 crore against a paid up equity of Rs 6,083 crore.

It has outstanding loan of Rs 10,159 crore and lenders have stopped further disbursal due to non-viability of the project, he wrote.

Also Read: Port City Of Mundra Is Losing Its Mojo

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