Govt, lenders close to resolving stressed power assets: Piyush Goyal

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New Delhi: Stressed assets in the power generation sector, which have not wilfully defaulted on loans, are likely to be taken over by lenders under a resolution plan being worked out, power minister Piyush Goyal said on Monday.

Goyal said at a briefing here on the National Democratic Alliance administration’s three years in office that the government’s discussion with banks and financial institutions such as Rural Electrification Corp. and Power Finance Corp. is close to reaching a resolution.

A government official, who spoke on the condition of anonymity, said that stressed power projects taken over by banks will be outsourced to state-owned or private entities for managing the plant operations efficiently till the lender finds a potential buyer.

Goyal said the resolution will cover stressed assets where promoters are not wilful defaulters and where there are no irregularities. “The final beneficiary will be the consumer. It is not a crisis. It is an opportunity,” said the minister.

Two executives with different power sector lenders, who spoke on the condition of anonymity, said stressed assets in the power sector is in the range of about Rs4 trillion, out of the total Rs10 trillion bad debts in the banking sector, including restructured assets.

Once acquired, lenders and the central and state governments will try to turnaround the power projects. Central and state governments will support in rationalising fuel supplies and in tying up power purchase agreements and improving their operational efficiency.

“We have worked out the broad structure of the plan. We will give more details once it is final,” Goyal said.