The Economic Times daily newspaper is available online now.

    PFC Projects likely to rope in investor partners for stressed power projects

    Synopsis

    PFC Projects Ltd, an equal joint venture of Power Finance Corporation and REC Ltd, is likely to rope in technical or strategic investor partners to operate and maintain acquired stressed or non-performing assets next year.

    PFCiStock
    PFC Projects Ltd, an equal joint venture of Power Finance Corporation and REC Ltd, is likely to rope in technical or strategic investor partners to operate and maintain acquired stressed or non-performing assets next year. PFC Projects Ltd (PPL) will rope in strategic investor partners through competitive bidding and the first such bid is likely to be floated next year, a source told PTI.

    The joint venture has been set up for taking over stressed assets or NPA (non performing assets) in the power sector. Earlier this month, the boards of PFC and REC approved a subscription of 50 per cent equity each not exceeding Rs 50 crore each in the PPL.

    "The PPL will explore both options of technical as well as strategic partners for running the acquired stressed power plants. It will select a technical or strategic partner for each acquired stressed project through competitive bidding. First such bid is likely next year."

    At present, the company has bid for two stressed projects--3600 MW KSK Mahanadi Power project and 1920 MW Lanco Amarkantak Power project. The company filed a joint bid with state-run power giant NTPC for the 3600 MW KSK Mahanadi Power project.

    The company will require a technical or strategic investor partner for the 1920 MW Lanco Amarkantak Power project.

    The source said that the company is likely to invite bids for a technical or strategic investor partner next year as the stressed project is undergoing insolvency proceedings which may conclude in 2023.

    The company will choose an investor partner for each acquired project. The PFC is a non-banking finance company under the administrative control of the Ministry of Power for financing projects in the sector.

    The PFC Board on August 12, 2022 accorded approval for creation of Power Asset Management Company (PAMC) for taking over the stressed/NPA power assets.

    The creation of PAMC is subject to further approval from Ministry of Power and other authorities. PAMC will be a joint venture between PFC and REC with equal share of 50:50. The REC Board on August 5, 2022 approved the proposal for subscribing to 50 per cent equity in PAMC.

    PAMC will be a professional organization which will have the expertise to acquire stressed power assets, operate, maintain and to complete them wherever required, it has stated.

    The company has also said that sustained resolution efforts has resulted in standalone net NPA levels to drop below 2 per cent - the lowest in five years.

    The net NPA ratio stood at 1.73 per cent for Q1'23 viz-a-viz 2 per cent in Q1'22.

    The 23 basis points reduction in consolidated net NPA ratio from 1.80 per cent in Q122 to 1.57 per cent in Q123 is due to resolution of stressed assets, it has said. PTI KKS ANZ MR MR


    (You can now subscribe to our Economic Times WhatsApp channel)
    (Catch all the Business News, Breaking News Budget 2024 News, Budget 2024 Live Coverage, Events and Latest News Updates on The Economic Times.)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    ...more
    The Economic Times

    Stories you might be interested in