Economy

Power sector debt worth ₹1.34-lakh cr is at high risk, says rating agency Crisil

Press Trust of India Mumbai | Updated on January 16, 2018 Published on October 23, 2016

Nearly ₹1.34-lakh crore worth of debt on operational and under-construction power projects is at risk, according to ratings agency Crisil.

As per Crisil estimates, around 17,000 MW of operational power projects with a debt of ₹70,000 crore and additional 24,000 MW under-construction projects with a debt exposure of around ₹64,000 crore are at high risk.

“These operational projects are those that are facing the consequences of aggressive bidding for coal supplies or facing huge cost overruns, and those with gas-supply issues,” said Crisil Senior Director Sudip Sural.

He said credit growth to the sector will moderate to 5 per cent over the next three years as compared to an average of 18 per cent witnessed in the last five years.

“This is primarily because the discoms’ debt, which has been the key component of this exposure, is going to go out of the banking system over a period of time and move to the fold of the State government because of the UDAY scheme,” Sural said.

Also, fresh investments in the thermal generation sector will remain muted, while on the other hand the capacity addition in the renewable space will give some fillip to the credit growth, he said.

As far as delinquencies are concerned, Crisil noted, while the gross NPAs in the sector have increased from 1.3 per cent to 4.4 per cent in FY16, the stressed assets as measured by gross NPAs and restructured standard assets continue to remain steady at 14 per cent.

Crisil further observed that in the discoms space banking sector debt is expected to come down significantly over the next three years with UDAY making an increasing impact.

Fresh investments in the thermal generation sector will remain muted, while capacity addition in the renewable space will give some fillip to credit growth.



Published on October 23, 2016
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