The Power Ministry is working on a proposal to deal with over Rs 4 lakh crore loans of power distribution companies with a view to bring down their liabilities.

A proposal to provide permanent solution to issues of debt-ridden power distribution companies will be put before the Union Cabinet “very soon”, Power Minister Piyush Goyal said today.

Hit by subsidised tariffs, state electricity discoms are facing cash crunch and are incurring annual losses of about Rs 60,000 crore.

This is also affecting public sector banks as their bad loans are rising.

The Power Ministry is working on a proposal to deal with over Rs 4 lakh crore loans of power distribution companies with a view to bring down their liabilities. 

When asked about the ministry putting the proposal before the Cabinet, the minister said, “Very soon I can say at this juncture. The discussion with all major states facing problems are almost complete. I will meet Madhya Pradesh Chief Minister tomorrow in this regard”. 

Goyal has several rounds of meetings with different states including Tamil Nadu, Uttar Pradesh, and bankers to sort out the issues relating to burgeoning debt ailing these discoms.

Earlier the UPA government had finalised a financial restructuring plan (FRP) for the discoms. But that did not serve as permanent solution.

About the banks’ readiness to take a hit by lower interest rate for these discoms, Goyal said, “I can assure you that every bank has hailed the innovative way in which a permanent resolution to the discom problems has been worked out. Banks are delighted at the entire proposal.”

State-run electricity distributors are running out of cash and struggling to repay loans, squeezing banks’ ability to spur credit growth and undermining Prime Minister Narendra Modi’s campaign to attract more energy-hungry manufacturers to build new factories.

The central government would like states to raise power prices gradually, but they must decide by themselves, Power Minister Piyush Goyal told reporters on Wednesday. 

State-run electricity distributors are running out of cash and struggling to repay loans, squeezing banks’ ability to spur credit growth and undermining Prime Minister Narendra Modi’s campaign to attract more energy-hungry manufacturers to build new factories.

 Modi is to tell states to raise electricity prices in return for access to a financial bailout package, a politically contentious move that risks a backlash from farmers and consumers long used to free or cheap power.

Although a majority of rural households do not have LPG or other clean cooking options, Uttar Pradesh scored better than other states while Jharkhand reported the lowest level of access to clean cooking energy, the survey found out.

Global investors are willing to commit up to USD 10 billion in the country’s renewable energy sector, Power and Coal Minister Piyush Goyal said. 

“In one of my meetings in New York, a very large investor, which handles probably the world’s largest fund basket, has committed to me on the table that if you were to invite us to come in for renewable energy…then I’m willing to commit 10 billion dollars in a month,” he told reporters here. 

Goyal, who also holds the new and renewable energy portfolio, was speaking to reporters after the release of the report titled ‘Access to Clean Cooking Energy and Electricity – Survey of States’ (ACCESS). Replying to a query, he said the western world should give up its consumerist philosophy and actually start contributing to combating climate change.

At the function, he said: “The ACCESS study provides a holistic approach to analysing the deep distress in rural India due to poor cooking energy access and could be the handbook for all future discussions on this topic.”

“My government is committed to providing affordable and quality energy access to the entire country. I applaud the efforts of urban citizens who have already given up their LPG subsidies as part of the ‘Give it Up’ campaign. I would urge other citizens from urban India to do the same,” he said.

This will also have significant health benefits and improve the quality of life for an increased number of households, the Minister added. 

Goyal released an independent study by the Council on Energy, Environment and Water (CEEW), in collaboration with the Columbia University. According to the largest energy access survey in India, only a fifth of rural households have access to an LPG connection and 95 per cent of rural households use some form of traditional fuel for cooking.

Although a majority of rural households do not have LPG or other clean cooking options, Uttar Pradesh scored better than other states while Jharkhand reported the lowest level of access to clean cooking energy, the survey found out. 

ACCESS is India’s largest energy access survey, covering more than 8,500 households, 714 villages and 51 districts, across Bihar, Jharkhand, Madhya Pradesh, Odisha, Uttar Pradesh and West Bengal.

Coal and Power Minister Piyush Goyal further said that the framework will completely liberalise the ability of the companies to use coal in the most cost-effective manner.

Government on Tuesday said it will soon notify the guidelines for swapping of coal linkages, a move that would help the nation save at least Rs 20,000 crore in electricity bills. 

“The correction of the grade of coal and the permission or ability to swap coal or exchange coal within plants, within the same company or even between the companies based on the guidelines — which we will be shortly notifying after approval — will help the nation save at least Rs 20,000 crore in power bills,” Coal and Power Minister Piyush Goyal said during a workshop here. 

He further said that the framework will completely liberalise the ability of the companies to use coal in the most cost-effective manner.

“We are looking at liberalising the coal linkages so that intra-company for example NTPC may have linkages for 45 plants it can swap it inter-se those plants in the most cost effective manner… states, public and private sector companies will also be permitted to exchange coal,” he said. 

On ailing discoms, he said that the government is working on a permanent solution and is in consultations with the states and ministries involved.

“We are working on final contours of our plan. It is being drawn up in consultation with the states which are largely affected with discom losses. We are also in consultations with various ministries involved and I am quite sure that we will find a permanent resolution to this problem,” Goyal said.

“Gradually, we will trace out the current level of losses which is Rs 60,000 core a year and hopefully not allow this situation to occur ever again,” he said. 

The Union government has decided to revive the long-stricken Dabhol power plant by arriving at an arrangement in consultation in key stakeholders, Power Minister Piyush Goyal said today.

The Union government has decided to revive the long-stricken Dabhol power plant by arriving at an arrangement in consultation in key stakeholders, Power Minister Piyush Goyal said today.

The gas-fired 1,967 megawatt plant has remained shut since January last year for want of fuel after a decline in production at KG-D6 basin left it stranded.

But Goyal today said the project’s parent company, Ratnagiri Gas & Power Private Ltd (RGPPL), held a board meeting today where several issues were resolved and the project is expected to begin operations from November.

As part of the arrangement, RGPPL will be demerged into two separate companies owning the currently-defunct power plant and its LNG terminal, respectively. 

The central and state governments will provide financial support to the project, GAIL  will provide gas under the government’s recently-launched gas supply scheme for stranded power plants while NTPC  will operate it.

The Indian Railways will enter into a long-term power purchase agreement with the company at a price of Rs 4.7 per unit. 

RGPPL was formed jointly by NTPC and GAIL in 2005 to revive the controversial Dabhol plant in Maharashtra after it was shut down following a political controversy related to the pricing of its power sale deal with the state distribution company and after its erstwhile foreign promoter Enron went bankrupt.

RGPPL has debt of about Rs 8,500-9,000 crore, owned by banks such as SBI (Rs 1,750 crore), IDBI Bank (Rs 2,000 crore) and ICICI Bank (Rs 1,250-1,500 crore), among others, according to a Religare research note. 

Currently, NTPC and GAIL together hold about 51 percent stake in RGPPL; lenders, having converted part of their debt into equity, own about 35.5 percent while MSEB owns the remaining 13.5 percent.

Shedding light on the arrangement, IDBI Bank Deputy MD BK Batra told CNBC-TV18 that lenders and promoters (NTPC-GAIL) will jointly invest an additional Rs 1,000 crore in the demerged LNG company to help ramp up its capacity. 

IDBI’s own share of investment in the LNG plant would come to about Rs 125-150 crore.

The decision to demerge the LNG terminal — though an old proposal — is a sensible one, said former power secretary Anil Razdan.

“It makes perfect sense to make the LNG terminal a viable one because they were not able to get the required draft for six months of the year. So, if they need an investment of about Rs 1,000 crore, then the major partners should put in equity to make it a profitable venture,” he said.

On the power company front, IDBI’s Batra said the aim would be able to bring it up to a level where it is able to service its debt under the RBI’s 5/25 scheme.

Razdan hailed the government’s decision to allow Railways to buy power from the plant, saying that the government should now ensure the plant recieves enough gas for it to be able to go up to 50-60 percent capacity.

“The amount of gas they will currently get [under the stranded power plant scheme] will only cover about 350 megawatts,” he added.

The move to allow Railways to buy power is a “win-win”, former power secretary RV Shahi said. “The Railways’ cost of power procurement is quite high. With gas prices softening, there is further scope for the price to be reduced,” he said. 

“This is a big example of how everyone has come together to revive an asset and how we can get other productive assets up and running,” ICICI Bank CMD Chanda Kochhar told CNBC-TV18. 

“We should thank the FM, PMO, Railways and the Maharashtra government who have worked together to make this happen. Lenders worked with existing shareholders like NTPC and GAIL to revive Dabhol,” the ICICI chief added. 

Union Energy Minister Piyush Goyal was addressing a meeting of high level gathering of US companies in the renewable energy development and financing sector, organised by the Confederation of Indian Industry (CII) in partnership with the American Council on a Renewable Energy (ACORE).

India has appealed to American companies to come up with innovative solutions to address the massive energy needs of the world’s third largest economy, which is set to become the largest clean energy market in the next 10 years. Union Energy Minister Piyush Goyal was addressing a meeting of high level gathering of US companies in the renewable energy development and financing sector, organised by the Confederation of Indian Industry (CII) in partnership with the American Council on a Renewable Energy (ACORE). 

While acknowledging constraining factors, the Minister urged the US and it’s constituent companies to be a partner in this process and to help come up with innovative solutions so as not to miss out on the tremendous opportunity in India which is set to become the largest clean energy market in the next 10 years, a media release said.

Addressing the concerns and challenges faced by investors in India, Goyal in his remarks laid out the government’s vision for achieving the ambitious target of 175 GW of clean energy by 2022, it said. 

Goyal addressed concerns relating to the fiscal health of distribution companies in India and said that the government was looking for a long term and sustainable solution to the problem which will be implemented soon. A number of stalled projects are also being cleared, he told the investors.

Praising the government’s efforts in scaling up the clean energy sector, Chandrajit Banerjee, director general, CII said Indian industry stands ready to partner and work with the government to achieve the ambitious target set by the Prime Minister. 

Sumant Sinha, chairman and CEO, Renew a Power Ventures pointed out that USD 150 million of financing is required in the clean energy space of which USD 100 million will be debt and USD 50 million will be equity. “The US can play a big role in this space in India,” he said.

The US companies which attended the meeting included SunEdison, Bank of America, First Solar, Credit Suisse, Apex clean energy, Sun Power and Deutsche Bank. A high powered CII CEOs delegation, including Preetha Reddy, Apollo Hospitals; Kiran Mazumdar Shah, Biocon; Shiv Khemka, Sun Group; Rajan Navani, Jetline Group; Pranav Tanti,Suzlon; Rahul Munjal, Hero Future Energies and Kishore Nair, Welspun Energy also participated in the event. 

CII and ACORE yesterday signed a Memorandum of Understanding to help solidify and bolster cooperation in the clean energy sector through facilitation of dialogues between industry experts, the development of platforms to deepen cooperation as well as platforms to exchange policy recommendations and best practices.

NEW DELHI:  Holding consumer driven economies responsible for carbon emissions, Power Minister Piyush Goyal today said the principle of polluter pays must be respected in view of climate change talks.

“Principle of polluter pay seems to have been omitted and it must be respected in view of climate change talks,” Mr Goyal said responding a query on India’s commitment on emission levels in view of forthcoming global talks on climate change.

Addressing a CII conference, Mr Goyal asked developed nations to provide technology and soft loans for promoting renewable energy and reducing emissions in India.

The minister suggested that instead of just talking about green funds, the developed world should provide long term debt through them at lower interest rates.

The Polluter Pays Principle is an environmental policy principle which requires that the costs of pollution be borne by those who cause it.

In its original emergence the Polluter Pays Principle aims at determining how the costs of pollution prevention and control must be allocated.

Referring to the issue of emission he expressed the view that this has happened because consumer driven economies who use cheap power or energy.

India adds just 3 per cent of the world’s carbon emissions and entire South Asia with with one fifth of the world’s population adds only 4-5 per cent, he added.

France will be hosting and presiding the 21st Session of the Conference of the Parties to the United Nations Framework Convention on Climate Change (COP21/CMP11), otherwise known as ‘Paris 2015’ from November 30 to December 11.

COP21 will be a crucial conference, as it needs to achieve a new international agreement on the climate, applicable to all countries, with the aim of keeping global warming below 2 degrees Celsius.

On cooperation among South Asian countries, Mr Goyal said that India will be delighted to offer capital, technology and other required help for improving trade and commerce in the region.

TALCHER:  Union Coal Minister Piyush Goyal today inaugurated a multi-skill development centre in the premises of NTPC’s power plant at Kanhia.

“The multi-skill development centre is a long standing requirement of Odisha. It will provide skill training in different trades keeping in view the requirement of local Industries,” Mr Goyal said, adding that the centre would be funded by the central government.

It will train 40 youths in one batch, he said, adding, the centre would provide immense opportunity to young entrepreneurs to enhance their skill and help them raise their earning for themselves and the people employed by them.

Odisha has planned a Rs. 1,050 crore ITI (industrial training institute) and skill development centres for imparting training to local youths. While the central government has agreed to spend Rs. 660 crore, the state government would spend remaining Rs. 390 crore in the project, officials said.

Accompanied by Union Oil Minister Dharmendra Pradhan, the Union Coal Minister visited NTPC’s power plant in Talcher.

He would visit the coal mine of the Mahanadi Coalfields Ltd at Bharatpur and review the proposed Kalinga-Angul rail link.

After the review, Mr Goyal would lay the foundation stone of the proposed Rs. 500 crore Mahanadi Institute of Medical Science and Research Centre at Talcher.

Earlier, after reaching the state capital, Mr Goyal said keeping with the substantial rise in the production of coal in Odisha in recent months, the Centre will make efforts to further increase its productivity.

During his two-day visit to Odisha, Mr Goyal is scheduled to meet Chief Minister Naveen Patnaik tomorrow and discuss on enhancing the coal production in the state.