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The World Bank has made a U-turn on its stance that coal is the backbone of the India's energy economy 17 years after it agreed to lend $1.03 billion to Coal India along with a Japanese lending agency. The international lender has now decided not to invest in any coal-related project, be it a coal mine or a thermal power plant. 

Source: ET

SNP Insight

With rising concerns over current debt exposure of thermal power sector in India seeking fresh investments have turned into a herculian effort and that too from domestic lenders. As a result it has lead to a cascade on the big foreign funding agencies fearing any fresh investment on coal based business shall turn assets to NPAs. Its ironical for a country whose nearly 70% of the power demand is met by coal generation, to struggle seeking apt funds and be under immense pressure to restructure the debt exposure of generation companies which indeed surfaces a concern which needs primary attention by Government.