Money & Banking

48 new power projects approach banks for ₹1.5-lakh cr funding

Shishir Sinha New Delhi | Updated on November 21, 2014


Lenders get credit proposals from 194 projects in 20 sectors in Jan-Sept period

The power sector leads the race in seeking bank loans for new projects with investment proposals of over ₹1.50 lakh crore. This despite the sector facing problems of stranded assets and fuel supply constraints.

Across 20 sectors, including power and real estate, banks have received proposals for 194 new projects between January 1 and September 30 with an investment of over ₹4.68 lakh crore. Each of these projects entailed an investment of ₹250 crore or more, according to data collected by the Finance Ministry.

Though the power sector is behind commercial real estate in terms of number of projects, the size of investments in higher. The projects include generation, transmission and distribution, and new and renewable energy.

Sesa Sterlite leads the pack with plans for a ₹16,000-crore project in Odisha. The proposal is with Syndicate Bank, which has already sanctioned and disbursed₹1,525 crore. This is followed by Teesta Urja in Sikkim with an investment of ₹11,382 crore, Talwandi Sabo Power in Punjab (₹11,040 crore), Bhushan Power and Steel in Odisha (₹9,765 crore) and East Coast Energy in Andhra Pradesh (₹9,343 crore).

Credit off-take

A large number of projects approaching banks will give some boost to credit off-take, it is felt. According to the data, gross advances of public sector banks has recorded a year-on-year growth of 9.06 per cent against 18.8 per cent as on September 30, 2013. At a recent meeting, Finance Minister Arun Jaitley had asked bankers to take steps to increase credit flow to various sectors.

Jaitley expressed hope that credit growth will pick up in the second half of the fiscal.

The commercial real estate sector has 67 projects with a total investment of around ₹82,000 crore. This includes Wave Megacity Centre in Uttar Pradesh with an investment of ₹8,764 crore, Navi Mumbai SEZ in Maharashtra (₹6,300 crore), Parsvanath Rail Land Project in Delhi (₹4,568.72 crore), Raghuleela Builders in Maharashtra (₹4,076 crore) and Nava Raipur Development Authority (₹3,590 crore).

Campaign boost

With the Make in India campaign, the number of new projects/proposals seeking funds from public sector banks is likely to go up. The new campaign is being complemented by a liberal FDI regime, particularly in Defence and Railways, as well as easing of environmental procedures, a senior Finance Ministry official said.

The power sector also tops the list of unresolved or stalled projects. The Finance Ministry, quoting data as on November 19 from the Project Management Group in the Cabinet Secretariat, has listed 93 unresolved or stalled projects, of which 33 belong to the power sector.

Stalled projects

Under the unresolved or stalled projects category, State Bank of India has 22 projects with a cost of over ₹1.89 lakh crore, followed by IDBI Bank with 15 projects involving a cost of ₹15,000 crore and UCO Bank with two projects at ₹7,234 crore. Although no reasons have been given for the projects being stuck, it is understood that land acquisition, environmental clearances and fuel linkages are the key reasons.

Published on November 21, 2014

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