Union Minister RK Singh on Wednesday asked lenders of stressed power assets, including state-run Rural Electrification Corporation (REC), to ensure sustainability of electricity projects while addressing the bad loan issue in the sector.
"Power Minister RK Singh during meeting on stressed assets with lenders including REC, has emphasised on the need for sustainability of these assets," a source said after the meeting chaired by the minister.
Singh had called a meeting of lenders of stressed power assets to resolve the issues related to bad loans for avoiding any distress sale.
During the meeting, 'Pariwartan' scheme proposed by the REC was also discussed. Under the scheme warehousing of stressed power projects is mulled to protect value of these plans.
The scheme stands for power asset revival through warehousing and rehabilitation. It proposes to warehouse around 25,000 MW stressed projects under an asset management company to prevent distress sale.
Earlier in the day, Power Secretary A K Bhalla had said, "There are some issues in the scheme (Pariwartan) which needs to be discussed. There are some concessions that are needed from RBI like upfront valuation of the stressed assets".
Stressed power assets are a cause of concern and the government set up an empowered committee headed by the Cabinet Secretary to resolve issues related to these plants. The first meeting of the panel held on August 31, 2018 where RBI representative was not present. The government had invited RBI for the first meeting.
The issue of stressed assets in power sector became more vicious after Allahabad High did not give any reprieve to these plants from RBI's new framework for resolving bad loans issue on February 12, 2018.
The RBI framework provided for strict timeline for resolution of these bad loans where debt is Rs 2,000 crore or more. It mandates insolvency proceedings to start in case no resolution plan is provided by lenders within 180 days of default.A Parliamentary panel had earlier recommended new framework for resolution of stressed assets in power sector saying RBI's framework, brought in February, "addresses only financial issues, ignoring the whole range of vital issues of electricity sector".