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Speedy deployment of Flue Gas Desulphurisation (FGD) system seeks provisional tariff hike

To reduce SOX and NOx emissions environment ministry in 2015 announced phased implementation of FDG across all thermal capacities and those faulting to comply with such norms by 2022 will have to face penal action by ministry. Investment in upgradation of thermal plants is capital intensive and requires huge amount for FDG installations. Thermal plans have reached out to lenders to fund such augmentation, but failed due to absence of any PPA and tariff hikes. Banks and lenders are concerned about declining electricity demand and absence of trajectory of tariff in future and therefore they hesitate to invest further in the projects. Also most of projects are stressed and securing funds for such risky projects is difficult.

Due to challenges faced by thermal plants in funding for refurbishment, thermal plants have urged Ministry to extend the deployment deadlines, so that thermal plants gets more time to build confidence of lenders and secure funding in the light of provisional tariff hike.