All households to be electrified before 2022: Piyush Goyal
All households in the country will be electrified before August 15, 2022 and all villages before May next year, the Lok Sabha was informed today. Power minister Piyush Goyal said the government has set a deadline of August 15, 2022 for electrification of all households in the country and May 2018 for the electrification of all villages. Goyal said he was happy to announce that the government will complete the task much before the deadlines set. The minister said during Question Hour that the accumulated loss of DISCOMs has increased from Rs 2,53,700 crore in 2012-13 to Rs 3,60,736 crore in 2014-15. As per the ‘Report on Performance of State Power Utilities’ published by Power Finance Corporation Limited (PFC), the accumulated losses and outstanding debt of DISCOMs have increased from Rs 2,53,700 crore and Rs 3,04,228 crore respectively from 2012-13 to Rs 3,60,736 crore and Rs 4,06,825 crore respectively in 2014-15. “I am hopeful that we will improve the situation with the help of the state governments,” he said. However, since launch of Ujwal DISCOM Assurance Yojana (UDAY) in November 2015, the participating states have provisionally reported reduction in annual losses by approximately Rs 11,000 crore from 2015-16 to 2016-17, he said. The generation capacity from all conventional sources has increased by 99209.5 MW in the period 2012-13 to 2016-17. However, there is no established correlation between DISCOMs’ losses or debt with their generation capacity. Replying to another question, Goyal said the previous attempts at addressing the DISCOMs’ adverse financial position were limited, as they could not achieve financial and operational turnaround. “Accumulated loss and debt kept on increasing due to several reasons which includes limitations of the scheme, limited participation of states and unsustainable operations of DISCOMs,” he said. Jason Pierre-Paul Jersey
Flouting norms led to higher bad loans of REC, PFC: CAG
Government auditor CAG today slammed state-owned REC and PFC for not following internal guidelines and RBI rules in sanctioning loans to independent power producers that led to surge in bad loans. “REC and PFC did not conduct appropriate due diligence during credit appraisal and in the process assumed higher risks on the loan accounts,” the comptroller and auditor general said in its report tabled in Parliament. It noted that both the Rural Electrification Corporation (REC) and the Power Finance Corporation (PFC) deviated from their internal guidelines and also did not conform to the Reserve Bank of India guidelines in this regard. It also said experience and ability of promoters to develop projects was not assessed objectively as it was done based on individual judgement. The auditor took note of many projects where the promoter had poor experience not completing within schedule. The REC and the PFC disbursed loans of Rs 47,706.88 crore to independent power producers (IPPs) during 2013-14 and 2015 -16, which were audited by the CAG. During the same period, non-performing assets (NPAs) went up to 13.90 per cent from 2.32 per cent in the case of REC and 19.86 per cent from 4.28 per cent at PFC. In the sample selected for audit, nine projects had to be restructured multiple times, which increased interest by Rs 13,312.78 crore in six loan cases and resulted in NPAs of Rs 3,038.44 crore in three accounts. TThe CAG observed that both entities estimated a higher tariff at the time of appraisal of loan proposals, which resulted in sanction of loans of Rs 8,662 crore in six cases. In all these cases, the levelised generation cost was higher than the actual levelised tariff, and thus the viability of the project was doubtful, ab-initio, it added. The official auditor further observed that the pre- disbursements conditions were relaxed by REC and PFC from time to time. As per RBI guidelines (July 2013), financing agencies should not depend entirely on certificates issued by chartered accountants, but strengthen their internal controls and credit risk management system to enhance the quality of their loan portfolio. However, the CAG said no policy was in place at the REC and the PFC to ensure end utilisation of funds by the borrower. It noted diversion of Rs 2,457.60 crore by the borrowers and promoters in the sample reviewed. The CAG recommended that the process of appraisal of loan proposals, sanction and disbursement be strengthened. It also suggested that compliance with internal guidelines and RBI norms may be ensured at every stage of the loan appraisal, sanction and disbursement. Jack Ham Womens Jersey
Petronet eyes 26 per cent stake in IOC’s LNG terminal at Ennore
India’s largest importer of liquefied natural gas, Petronet has initiated talks for buying 26 per cent stake in Indian Oil Corp’s under-construction 5 million tonne LNG terminal at Ennore, its Managing Director Prabhat Singh said today. The Board of Petronet LNG Ltd has also approved making a formal proposal to Bangladesh for setting up of a 7.5 million tonne (MT) a year LNG terminal at Kutubdia Island, he said. “We have initiated dialogue with IOC. We would be looking at least 26 per cent in Ennore. IOC is also looking at strategic investor and I think we fit the bill,” he told reporters here. IOC’s Rs 5,151-crore liquefied natural gas (LNG) import terminal with a capacity of 5 MT per annum is expected to be completed by mid-2018. Also on the Petronet radar is taking a stake in Gujarat Petroleum Corp Ltd’s (GSPC) almost complete 5 MT terminal at Mundra in Gujarat. “We are in exploratory talks with GSPC.” Petronet had in April this year signed a set of heads of agreement with Bangladesh Oil, Gas and Mineral Corporation (PetroBangla) for the construction of a 7.5 MT LNG project in Bangladesh. The agreement, signed during the visit of Bangladesh Prime Minister Sheikh Hasina’s to India, followed a memorandum of understanding the two companies have signed in December 2016 for the construction of a USD 950 million LNG terminal at Kutubdia Island. “We now have board approval and will present a formal proposal to PetroBangla this month,” Singh said. Under the plan, Petronet would build the terminal in four years from the date of all approval and operate it as a toll service provider. PetroBangla will bring in its LNG and pay Petronet a tolling fee. Petronet reported a 16 per cent rise in April-June net profit to Rs 438 crore on highest ever gas being processed at its two terminals. It processed 192 trillion British thermal units (TBtus) of imported LNG – 184 TBtus at Dahej terminal in Gujarat and 8 TBtus in Kochi, he said. This compared with 178 TBtus processed in the preceding quarter of January-March and 165 TBtus in first quarter of the previous fiscal. Dahej operated at 97 per cent of its expanded 15 MT capacity while Kochi saw highest ever LNG processing and operated at 12 per cent of its 5 million tons a year capacity. Kochi does not have pipelines to take the gas to key consumption areas. Only 2 million standard cubic meters per day of gas offtake is done by Kochi refinery of BPCL and the neighbouring fertiliser plant of FACT. Singh said Petronet is looking at operating LNG fuelled buses. To start with 2 buses each at its Dahej and Kochi terminals would be operated to ferry employees. “These will be on pilot basins,” he said adding the company is looking at operating 10-20 buses in Gujarat and is talking to the state road transport corporation and also GSPC for using their fuel stations. In Kerala, it wants to operated 10 LNG-fuelled buses and is taking to BPCL to use its terminal space for storing LNG and refuelling them, he added. Dante Fabbro Authentic Jersey
Biggest Indian explorer ONGC is said to plan first ever borrowings
Oil and Natural Gas Corp. plans to tap the debt market for the first time, an opportunity that may be hard to pass up for bond bulls. India’s largest state-run energy producer may sell bonds and take out loans of as much as $4 billion to pay for the purchase of the government’s $5.2 billion stake in Hindustan Petroleum Corp. and bankroll $4.5 billion of projects, according to company executives with knowledge of the matter. Given the company’s credit metrics — it has 130 billion rupees ($2 billion) of cash on its books and a long-term rating that’s a notch above the government — the issuance will be bought by investors drawn to one of the world’s fastest growth rates and Prime Minister Narendra Modi’s economic policies. “The sentiment is positive toward India and because the supply from Indian corporates is limited, there will be demand,” Rishabh Tiwari, a Zurich-based fund manager for emerging market credit at Swiss Life Asset Managers, said in an interview. “ONGC has strong credit fundamentals and the acquisition of HPCL will help it diversify into downstream refining.” The appetite for India’s corporate debt is so strong that Hindustan Petroleum’s $500 million offering in July attracted bids for six times the amount. Billionaire Anil Agarwal’s Vedanta Resources Plc last week sold seven-year dollar notes in its second $1 billion sale this year. Even so, the planned fundraising could weaken ONGC’s credit profile at a time when earnings have been hit by the slump in global energy prices. Estimated cash flows of about 400 billion rupees this fiscal won’t be enough to pay for the planned investments, the executives said, asking not to be identified as they are not authorized to speak publicly. Risk Premium To Swiss Life Asset and Frankfurt-based Union Investment Privatfonds, it boils down to how attractively the issuance is priced. “If ONGC is willing to reflect the increased credit risk premium in light of the transaction, there’ll be interested investors,” said Hyun Kim, who manages $2 billion under four funds at Union Investment. “ONGC was one of the strongest quasi-sovereign credits before the HPCL transaction was announced. Leverage will likely increase with this, but the company should be able to handle it.” The company hasn’t borrowed since at least 1993 when it was converted into a corporation, the executives said. Its overseas investment unit, ONGC Videsh Ltd., has tapped the market to fund purchases of oil and gas blocks. Moody’s Investors Service has a Baa2 score on ONGC’s debt, making it the nation’s highest rated state-run company, said Vikas Halan, vice president and senior credit officer at rating company. That should provide the company with a “very strong access” to funding. Le’Raven Clark Womens Jersey