In a bid to expedite the private sector power projects, financial institutions on Tuesday resolved not to press for government guarantees, a move which could help capacity addition to the tune of 8,000-10,000 mw, covering projects including those of BPL, Torrent and Jindal group.The high-powered meeting of all the stake holders called by the Power Ministry decided that funding agencies would not seek such guarantees besides escrow cover as long as developers were credible and tariff reasonable, secretary R. V. Shahi said.But banking sources said this could lead to a dangerous situation wherein banks would end up holding a big bad loan. “Banks and FIs financial are unable to recover funds given to projects which have got government guarantees. What will be the case if no guarantees are available,” said a banker.It was also decided to identify projects whose financial closure could be achieved within eight weeks, Shahi said, adding this would be cover projects to the tune of some 8,000 mw. The meeting, chaired by Shahi, was attended by the Economic Advisor to Prime Minister S. Narayan, SBI chairman A. K. Purwar, PFC chairman A. A. Khan, secretaries of various energy departments besides project promoters. Some 23 projects had been identified. The deliberations covered several projects promoted by independent developers including Torrent’s 1,000 mw plan in Gujarat and Jindals’ 500 mw thermal station in Chattisgarh.
