"NTPC Announces Bid for Stressed KSK Mahanadi Thermal Power Project in Chhattisgarh"

State-owned NTPC is gearing up to place a bid for the distressed 1,800-megawatt (MW) KSK Mahanadi thermal power project in Chhattisgarh, currently undergoing a corporate insolvency resolution process (CIRP) at the National Company Law Tribunal (NCLT), according to official sources. KSK Mahanadi defaulted on bank loans totaling Rs 20,000 crore in 2018, with the Power Finance Corporation Limited acting as the lead lender for the project.

The debt restructuring process involved a haircut and asset sale after Adani Power withdrew its bid for the project in 2019. Subsequently, KSK Mahanadi was submitted to the NCLT under the Insolvency and Bankruptcy Code (IBC) in 2020. NTPC's bid for the project aligns with the union power ministry's initiative to encourage government companies to acquire stressed assets for both private and state-owned enterprises.

In November 2023, the Ministry of Power issued a letter urging central and state public sector power generating companies, as well as state power/energy departments, to participate in the CIRP of stressed power assets. The ministry emphasized the strategic and commercial significance of these assets to the capacity addition plans of the concerned states. The move aims to expedite the turnaround of stressed plants, addressing the increasing demand for power in various states.

The advisory listed four assets, including KSK Mahanadi, which had power purchase agreements with three states – Andhra Pradesh, Tamil Nadu, and Uttar Pradesh. The company faced default issues due to a coal supply shortage. Although it was allotted two coal blocks in Chhattisgarh, the allocation was canceled following a Supreme Court judgment in 2014. The plant later received coal linkage under the SHAKTI scheme but had to resort to coal imports due to a shortfall.

Earlier attempts by SBI, one of the project's major lenders, to resolve the issue through its SAMADHAN scheme were halted due to the reluctance of other lenders and a lack of buyers. The project was subsequently moved to the CIRP process under the IBC. NTPC's bid is poised to play a crucial role in the revitalization of the KSK Mahanadi thermal power project, contributing to the enhancement of power supply in the region.

BS