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In the wake of massive coal license cancellations in India, CoalGuru reported that India’s import bill for coal will increase by INR 18,000 crore, or about US$3 billion. Domestic coal supplies will also take a hit, as will the confidence of investors in the Indian economy.
In the wake of massive coal license cancellations in India, CoalGuru reported that India’s import bill for coal will increase by INR 18,000 crore, or about US$3 billion. Domestic coal supplies will also take a hit, as will the confidence of investors in the Indian economy.
As quoted in the publication:
Mr PC Parakh former coal secretary said that the economy will be severely impacted if the government fails to re-allocate the cancelled blocks within 6 months. Bankers refused to go on record, but an estimated INR 1 lakh crore loan has been extended by lenders to coal fired power companies.
Almost all banks including country’s largest lender State Bank of India and private sector ICICI Bank have lent to the power plants in question.
Kameswara Rao of PricewaterhouseCoopers India stated:
If we take just the operating coal blocks, of which 70% are for power generation, then on a normative basis of capital cost and debt-equity ratio, the bank exposure in mine and end-use will be about INR 35,000 crore.