The Rs 90,000-crore liquidity bundle for discoms to assist them pay their dues until the month of March would quickly be enhanced to Rs 1.2 lakh crore factoring in these utilities’ excellent until June, mentioned a senior official.
Finance Minister Nirmala Sitharaman in Might introduced a Rs 90,000 crore liquidity infusion into cash-strapped discoms for fee of their dues until March 2020. Discoms have been going through demand stoop as a result of lockdown to include COVID-19.
Collaborating in a webinar on ‘Innovation in Renewable Power’ organised by PHDCCI, Energy Secretary S N Sahai mentioned the liquidity bundle would cowl the excellent dues of discoms for the months from April to June additionally and it could be enhanced to Rs 1.2 lakh crore.
Whereas saying the bundle, the federal government had mentioned, “At current discoms have a complete excellent of Rs 94,000 crore in the direction of energy technology corporations (gencos).”
Nonetheless, later states demanded that the bundle be prolonged to incorporate excellent dues in the direction of energy technology and transmission corporations for the month of April and Might as nicely.
A supply mentioned that an official communication on this regard has already been despatched to the implementing state owned non-banking finance corporations Energy Finance Company (PFC) and REC by the Ministry of Energy.
The supply additional mentioned now the respective boards of REC and PFC will approve the hike in liquidity bundle to round Rs 1.2 lakh crore protecting a interval of dues until June this yr, by the top of September.
As a lot as Rs 68,000 crore has been sanctioned and round Rs 25,000 crore is disbursed to discoms beneath the bundle to this point. The supply additional revealed that extra states would avail the credit score facility beneath the bundle after the REC and PFC boards’ choice to hike the bundle. PFC and REC would apprise states in regards to the hike within the bundle after their boards’ choice on this regard.
Among the discoms weren’t eligible for getting loans beneath the bundle as a result of they weren’t assembly working capital restrict norms beneath Ujwal DISCOM Assurance Yojana (UDAY). Earlier in August, the Union Cupboard relaxed the working capital restrict norms for discoms beneath UDAY to get loans as a part of the liquidity infusion scheme.
Underneath UDAY, banks and monetary establishments are restricted to lend working capital as much as 25 per cent of a discom’s income within the earlier yr. The restriction was a part of UDAY, which was accepted in November 2015 by the Union Cupboard for revival of debt-laden utilities.
Moreover, discoms can get mortgage beneath the bundle towards the receivables from state governments to clear their dues. However among the discoms didn’t have headroom beneath each the provisions. Thus the ability ministry had proposed to loosen up working capital restrict norms in order that these discoms can avail loans beneath the bundle to clear their dues.
Sahai additionally careworn on the necessity to honour contractual obligation beneath energy buy agreements (PPAs) signed by discoms or states to safeguard traders particularly within the case of renewable power.
In previous, there have been instances when among the states’ utilities refused to honour PPAs in view of the falling tariff of fresh power. Sahai additionally made an assurance that the federal government is just about conscious in regards to the hydrogen as a supply of power.