Maharashtra Energy department has received a proposal to take over RattanIndia Power Ltd’s 1,350 MW Nashik thermal power plant, which has been declared a non-performing asset (NPA) by lenders.
A technical and financial evaluation of the plant was recently concluded, according to sources in the department.
The lenders of the project, primarily, Power Finance Corporation (PFC), had written to the energy department, proposing that the state generation company take over the project.
“The lenders had asked for an evaluation of the project. Based on the request, we have completed a technical and financial valuation. A meeting was held last month with the lenders. The state government will take a decision on whether or not to take over the plant,” said a senior government official.
The technical evaluation was carried out by state-owned utility, National Thermal Power Corporation (NTPC).
RattanIndia, formerly known as Indiabulls Power, has two coal-based power plants in Maharashtra — one in Amravati and the other in Nashik.
According to RattanIndia’s website, both plants were envisaged to be 2,700 MW each. However, five units of 270 MW each have been constructed at both Amravati and Nashik project site. While the Amravati plant has been commissioned and is supplying electricity to Maharashtra State Electricity Distribution Company Ltd (MSEDCL), the Nashik plant has a debt burden of close to Rs 9,000 crore to lenders, said sources.
The construction of the Nashik plant was completed in 2017 but the plant is lying idle.
“The Nashik plant had a power purchase agreement for 950 MW with the state utility but there was a dispute and the agreement didn’t come into effect. Hence, the plant has been lying idle. Given the strict NPA norms set by the Reserve Bank of India, lenders are looking to reduce their losses,” said the official. Emails sent to PFC and RattanIndia remained unanswered. Meanwhile, with electricity demand rising in the state in the last two years, the state generation company is also planning to increase its capacity.
“In such a situation, it could make sense to take over an existing plant rather than setting up a new one. However, we haven’t arrived at a decision yet,” he said. According to sources in Mahagenco, since the plant is sub-critical in nature and does not have a railway siding in place, the state utility may not want to invest in the project.
“It will take at least a year to set up the tracks for coal transport. Meanwhile, coal would have to be brought in by road, which is expensive. Moreover, at a time when the central government is pushing for more supercritical power plants with lower emissions, investing in a sub critical power plant doesn’t sound like a good idea,” said a source in Mahagenco.