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Government Plans on Introducing Easy Debt Financing Mechanism for Upcoming UMPPs

News

Companies winning bids for ultra-mega power projects (UMPPs) will be allowed to mortgage land and the coal blocks attached to them if the government accepts recommendations of an expert panel. 
Source: ET

SNP Insight

 If government accept this recommendation by the expert panel for upcoming UMPPs then it may help the developers to get easy debt financing for these projects. The risk financing the debt part of UMPPs may reduce substantially, which may reduce the cost of debt for developers. This low cost of debt may reduce the tariff  and benefit the end consumers. And also the proposed fuel cost pass through mechanism may reduce the risk for project developers and may make these projects more viable to win back the lost interest of investors.

Source: SNP Infra Research