Concerned over the refusal of banks to provide loans for Reliance Power’s 4,000-MW ultra mega power project at Krishnapatnam, as spiralling coal prices have impacted feasibility, the Power Ministry has asked the Andhra Pradesh Government to intervene in the matter.
With work on the Reliance Power project stalled due to unavailability of funds, the Power Ministry has asked the Andhra Pradesh Government to meet the procurer of power (primarily the home state) and developer of the project (Reliance Power) to further discuss the issue.
Reliance Power, which is developing this 4,000 MW ultra mega power project through a special purpose vehicle — Coastal Andhra Power Ltd — is believed to have stated that since coal prices shot up, banks have been shying away from providing funds for the project.
If the price of coal rises, it would increase the input cost of the power project and investors may not find it feasible to put money in such projects.