A large chunk of under-development coal-based power units have their construction stalled due to the paucity of funds, according to numbers obtained from the power ministry.
In total, projects that have a design capacity of 18,420 megawatt, or 18.42 gigawatt, are classified as ‘stalled’ due to financial reasons, the ministry said.
This is equivalent to almost a third of the total thermal power plants that are in various stages of construction in India. A state like Tamil Nadu, one of India’s largest, has a peak demand of 15,000 MW.
These 17 stalled projects — if completed — would increase India’s thermal power generation capacity by about 8.2%, and its total power generation capacity by about 6%.
Almost all of these assets are owned by private power companies, but nearly all of them have a component of bank funding in them as well.
The highest number of stalled thermal projects are in Jharkhand and Chhattisgarh, two of India’s most resource rich states.
Five projects, with a combined design capacity of around 5.5 GW are stalled in Chhattisgarh, while four projects, with a total capacity of around 3 GW, are stalled in Jharkhand.
Three projects are stalled in Maharashtra and two in Orissa.
The biggest projects — of 2.6 GW each — facing funding problems are Jas Infrastructure’s 2,640 MW plant in Bihar and the Akaltara project of KSK Mahanadi Power Co in Chhattisgarh.
The Jas Infrastructure plant has a budget of Rs 11,120 cr, while the Akaltara project is the biggest of the stalled project with a budget of 22,874 cr.
Out of the 22,874 cr, the company has already spent 15,543 cr on the construction of the thermal power project. The project was supposed to have been completed in 2013, and is now likely to be over sometime in 2018-19, the ministry said.
Similarly, the Mallbrahmani project in Odisha, with a budget of Rs 6,330 cr, was supposed to have been complete in early 2013. The plant, which has already seen an expenditure of 5,329 cr, is now expected to be ready in the coming financial year.
In addition to these thermal power plants, another 11,150 MW worth of hydro-electric power projects are also facing delays, but due to other reasons.
Unlike thermal power plants, these hydro-electric power plants have mostly run into environment-, resettlement- and compensation-related problems.
In cases where the developers of such projects run out of funds in between, banks have been authorized to convert their debt into equity in viable projects, take over control and push them to completion.
In June last year, the government of India-controlled Power Finance Corporation (PFC) acquired majority equity of 51% of shares of Shree Maheshwar Hydel Power Corporation by seizing the shares of the developer that had been submitted as surety for a loan, and by converting some of its outstanding loan into equity.