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Discom’s Negligence for Long-Term contract looms stressed assets being cobbled by PPA Auctions

<p><span style="font-size:14px">Discoms in the past 5 years have shown reluctance to materialize long-term contracts and preferably chosen short-term contracts. Lack of PPA is one of the key reason for upsurge in stressed Asets, this has created financial crunch impacting coal supplies and issues in honouring contractual obligations. </span></p> <p><span style="font-size:14px">Pilot scheme triggered by Government to revive stressed assets of 2200 MW, may boost up idling capacities and owners of&nbsp; stressed assets will be able to repay debt obligation and meeting basic O&amp;M cost. This scheme provides certainty as it assures minimum offtake of 55% of contracted capacity and the tariff to be fixed for three years without any escalation. The scheme is envisaged to rejuvenate capacities that may add up to cater rising demand.</span></p>