NTPC likely to bid for KSK Mahanadi thermal power project

The public sector unit NTPC has envisaged to bid for the stressed 1,800 MW KSK Mahanadi thermal power project in Chattisgarh which is currently undergoing a corporate insolvency resolution process at the National Company Law Tribunal [NCLT].

The stressed power project was reported to default on bank loans worth Rs 20,000 crore in 2018. Initially, in 2018 the lead lender for the project was the state-owned Power Finance Corporation Limited which initiated the debt restructuring through the sale of assets and financial resolution. But later on, the company was submitted to NCLT under the Insolvency and Bankruptcy Code.

The central ministry and the corresponding units are together working to step forward for the indigenous power development via resolving the stressed assets which are considered to be having enough potential to restructure the producing capabilities. The need of the hour is to fulfill the consumption demands growing day by day.

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The government is requesting the state-owned power units to encourage participation in the CIRP of stressed assets which are meant to be strategically and commercially important to add significant capacity to meet the energy demands, therefore all state or central power generating companies are requested to pick the projects which are undergoing insolvency proceedings.

The ministry in its advisory has listed four such assets out of which KSK Mahanadi has opted to be one as the project is still operational and has power purchase agreements with three states -Andhra Pradesh, Tamil Nadu, and Uttar Pradesh. The company was defaulted due to a lack of coal supply. 

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The company reported revenues of only Rs 200 million [USD 3 million] in the 2017 fiscal year, where 1200 MW of production capacity was operational during that year. But in 2014, the Supreme Court of India canceled wholesale all coal allocations made since 1993 by the government of India which transferred a monopoly on coal mining in the1950s.

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