In a bid to ease some pressure off the power projects which are stranded due to difficulties in securing fresh loans or are facing delays in getting fuel supplies, Bharat Heavy Electricals (BHEL) has offered to pick up some of their equity stakes.

BHEL, a major supplier equipment manufacturer has been troubled by payment defaults by power producers that have resulted in its outstanding shooting up in recent months. The company’s total dues outstanding as of June 2013 stand at around Rs 39,000 crore.

“We are in touch with banks to see whether our equity support to some of the stranded projects gives them the confidence to lend more and allow commissioning of these power plants. The move will also help us improve our outstanding dues position, as progress in projects would ease pressure on developers to pay their dues,” a top official of BHEL was quoted in The Financial Express.

As per the plan, BHEL would evaluate the stranded projects on a case to case basis for equity infusion that is expected to be restricted to minority shareholding level. A source in the heavy industries ministry said that depending on the status of a project, the equity infusion by BHEL could be up to 26% level so that, if need be, the company could also actively participate in target company management.

BHEL is also exploring the possibility with banks to completely change the management of some of the stranded power projects and give its operation to NTPC. This, however, is at pre-mature level of discussion. “We cannot run a power project. So it would be better if expertise of NTPC could be used in certain cases,” the official was quoted.

The official said that though fuel related issues including tariff adjustment are main cause for delays in power projects, BHEL believes that financing will also play an important role as other issues are now being handled at the highest level of prime minister’s office. BHEL is hoping give positive signal to lenders by offering equity support to bankable projects.