Move to revive gas-based power will benefit banks

Terming the Indian Government´s decision to revive and improve utilisation of the country´s stranded gas-based power generation plants to import feed stock through e-auctions as ¨credit positive¨, ratings agency Moody´s said that this will benefit banks, especially IDBI Bank, the State Bank of India and ICICI Bank, as they have significant exposure to such plants. Power plants that use liquefied natural gas (LNG) as fuel have been facing significant availability and pricing challenges, because actual domestic production of LNG has been significantly lower than the assumptions made when the plants were set up. Around 14,305 MW power generation capacity out of 24,150 MW gas-grid-connected units in the country, have no supply of domestic gas and may be considered as stranded and the CCEA´s nod to this move will immediately lead to resumption of power generation to the extent of 14,000 MW.