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In the scorching summer months when the solar power industry should be at its best, it is plagued with financial woes.
The total outstanding dues of solar-power companies supplying power to Telangana have shot up to ₹2,400 crore, plunging them in a financial crisis.
“The prospect of many developers being declared defaulters looms large as they have not honoured debt obligations. With new norms in place, if payments are not made within 90 days, the company is declared defaulter,” KN Chandrasekhar, General Secretary, Telangana Solar Power Developers Association, told BusinessLine .
The State, which has a solar installed capacity of about 3,600 MW and is on the verge of offering another 1,100 MW for development, has not been making payments since July 2018.
The State’s distribution companies and the Transmission Corporation have stopped paying bills. As of April, the total outstanding due is pegged at ₹2,400 crore.
According to representatives of solar-power producers in the State, the last payment pertaining to the supply made in June 2018 was made in the first week of April this year, after a delay of nine months.
The previous bill (for power supplied in May 2018) was paid in December 2018.
Other power producers and suppliers — including Central government enterprises, TS discoms — are owed about ₹10,000 crore, they said.
Developers in trouble
In all, 200 solar power projects totalling 3600 MW have been installed in Telangana as at end-April, and account for about 30 per cent of the power required by the State.
Various projects were awarded through the competitive bidding process and Power Purchase Agreements signed with the discoms.
As per the developers, thus far, more than ₹20,000 crore has been invested in setting up these plants, and all of them are in financial distress.
Due to the delay in payments, the developers are not in a position to service the loans availed for setting up the projects.
As on date, most of the projects have or are about to become NPAs.
Most of the small and medium developers, who are first-time entrepreneurs and have set up 1-10 MW plants, had to mortgage their personal properties to avail loans for completing the projects.
Since the payments are to be made by the defaulting government, the developers are in a state of quandary.
Efforts to raise loans to clear these dues have also failed, as the State government did not provide sovereign guarantee.
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