The letter has been reviewed by Business Standard.
is the country’s dedicated financial institution for renewable projects. It is staring at a debt exposure of Rs 2,750 crore in Andhra, said a person close to the development.
In July, the newly formed Andhra Pradesh government, led by National Democratic Alliance ally YSR Congress Party, formed a high-level negotiation committee (HLNC) to ‘review, negotiate, and bring down’ tariff of all competitively bid and won renewable power projects in the state. In its order to review ‘high tariff’, the state cited poor financial status of its power discoms
as reason to review the tariff.
have dues of Rs 20,000 crore to power generating companies. Its annual net income stands at a loss of Rs 1,563 crore, according to the Ujwal Discom Assurance Yojana portal.
Renewable power project developers are staring at weak cash flows from their projects in Andhra Pradesh. Not paid by the state for a year, these companies fear stalled payment till legal clarity emerges on the state’s decision to renegotiate tariff of all renewable projects. Sector executives said the unpaid dues total up to Rs 7,000 crore for the past year.
Of the leading lenders, YES Bank is learnt to have the highest exposure, with close to Rs 7,000 crore. State-owned lenders Power Finance Corporation and Rural Electrification Corporation are also fearing loan defaults of Rs 2,800 crore and Rs 1,200 crore, respectively, said senior executives. The state also has an outstanding of Rs 243 crore payable to Solar Energy Corporation of India — the government company for awarding renewable energy projects.
Singh’s letter is the second to be issued by the Centre to Andhra Pradesh. Last month, Ministry of New and Renewable Energy secretary asked the state to not cancel any renewable projects as it will have serious ramifications on investments in the sector.
The Indian Wind Power Association, along with a dozen wind power firms and a couple of solar companies, including ACME Solar and Waaree Energies, moved writ petitions to the Andhra Pradesh High Court. It stayed proceedings of the HLNC. All submissions have been made in the case, by last week. Of the total dues of close to Rs 10,000 crore, Andhra tops the list, with more than Rs 2,500 crore. The Central Electricity Authority
(CEA) is preparing the data for outstanding dues of renewable projects by the states. While the data is still being updated, the CEA estimates dues of renewable projects would be close to Rs 20,000 crore, with Andhra, Tamil Nadu, and Telangana being the biggest defaulters.