The Ministry of Power (MoP) has issued an advisory encouraging all States/ Generation Companies (GENCOs) to participate in the Corporate Insolvency Resolution Process (CIRP) for taking over stressed thermal power assets. This advisory is dated 1st November, 2023.
It is pertinent to note that under the aegis of the MoP and the Ministry of New and Renewable Energy (MNRE), several central Public Sector Undertakings (PSUs) have successfully assisted the resolution of various stressed power assets under Insolvency and Bankruptcy Code, 2016. They have done so by either directly participating in the CIRP as a Resolution Applicant or through Lenders’ backed Resolution Plan (LbRP).
Such participation has produced the following results:
- resolution and revival of significant public investment and national resources in stressed power assets
- capacity addition to stressed power assets
- cost savings
- time saving and
- competitive prices for power to end-consumers
Therefore, to bolster this endeavour, MoP is now encouraging State-owned GENCOs to also participate in CIRP of stressed power assets. Such participation may be linked to assets that are of strategic and commercial significance to the capacity addition plans of the concerned states.
State-owned GENCOs are advised to acquire stressed power assets through IBC under the National Company Law Tribunal (NCLT) route and contribute to the overall generation capacity of the nation.