India’s Samadhan scheme to provide lifeline to stressed power assets

Author: Karry Lai | Published: 8 Aug 2018

The Indian government hopes to provide a lifeline to stressed power projects so they don’t have to go insolvent as India’s energy sector faces a debt crisis. To prevent the liquidation of energy plants, the Samadhan (scheme of asset management and debt change structure) scheme is being created for banks to take over debt of power plants experiencing difficulties, with 11 sites already shortlisted. 

The idea is to reduce the debt to a manageable level and then convert the remaining unsustainable debt into equity which can be bid out to interested buyers. The 11 projects include Lanco Infratech’s Anpara power plant, Jaypee Power Ventures’ Nigrie power plant and KSK Mahanadi’s plant in Chattisgarth. All are either complete or close to completion.  The Allahabad High Court ruled on May 31 that no action can be taken against the projects under the remit of the Reserve...