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Generators at Risk with End of Tripartite Agreement between RBI, Union and State Government

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The power sector is staring at a fresh crisis. A tripartite agreement between the Reserve Bank of India (RBI), the Union government and the state governments, which provided comfort to power producers against payment defaults by state electricity boards (SEBs), will lapse in October 2016 and there is no certainty that a replacement would be ready in time.
Source: Live Mint

SNP Insight

The end of tripartite agreement would certainly hamper the generators as they may lose the guarantee of getting dues from discom annual transfer by government. This may curb the power of generators for discontinuing the supply and selling it to the market impacting the incentives linked to the PLF of the plant. 

Also, lobbying the government to extend the agreement would not likely to solve the problem with existing non reflective tariff of disom. The problem may be soothen out only by making SEB's independent entity.
Source: SNP Infra Research