Hyderabad: The Comptroller and Auditor General of India (CAG) has slammed the Power Finance Corporation and the Rural Electrification Corporation for violating internal guidelines and RBI rules while lending to independent power projects such as Lanco, Nagarjuna, Krishna-Godavari and GVK.
In the report tabled in Parliament two days ago, the CAG said that between 2013-14 and 2015-16, the two corporations had lent IPPs Rs 47,706.88 crore. At the end of 2015-16, the total NPAs with these IPPs stood at Rs 11,762.61 crore.
The CAG said that the financial capacity of the promoters to bring equity for their projects in the face of competing demands was not adequately assessed by the PFC and the REC.
In the sample selected by the CAG, nine projects had to be restructured multiple times which increased the interest amount of Rs 13,312.78 crore in six loan cases and NPAs of Rs 3038.44 crore in three cases.
Nagarjuna: The company given Rs 2,710 crore for 1,320-MW project had no experience in the field.
Lanco: Rural Electrification Corporation adjusted Rs 496.02cr beyond approved loans of Rs 3,294.35cr.
Krishna-Godavari: The coal-based project given to three entities which had no experience in power projects.
GVK: Power Finance Corporation did not consider taxes running into crores as the project would have turned unviable.