Global rating agency, Moody’s Investors Service in its latest report titled 'Power Sector - Asia Pacific: 2017 Outlook - Rising Industry Challenges Are Manageable, Outlook Stable', has upgraded India’s power sector outlook to stable from negative, stating that they have changed the outlook for the Indian power sector to stable, because the increased domestic production of coal will ease constraints on fuel supply.
In addition, Moody’s said that the government's debt restructuring of the financially weak distribution utilities through UDAY scheme will likely improve their financial capacity to make timely payments to power generators. It also said, in India, renewable generation could act as a complementary source of power rather than a competitor to thermal, owing to power shortages.
On the stable outlook, for the power sector in Asia Pacific over the next 12-18 months, the ratings agency said that it is mainly supported by consistent regulatory returns and its expectation of manageable increases in fuel costs over the same period, as well as the absence of significant changes to regulatory environments.
