Package to cover outstanding dues of discoms for the months from April to June: Power Secretary
The ₹90,000-crore liquidity package for discoms to help them pay their dues till the month of March would soon be enhanced to ₹1.2 lakh crore factoring in these utilities’ outstanding till June, said a senior official.
Finance Minister Nirmala Sitharaman in May announced a ₹90,000 crore liquidity infusion into cash-strapped discoms for payment of their dues till March 2020. Discoms have been facing demand slump due to the lockdown to contain COVID-19.
Participating in a webinar on ‘Innovation in Renewable Energy’ organised by PHDCCI, Power Secretary S. N. Sahai said the liquidity package would cover the outstanding dues of discoms for the months from April to June also and it would be enhanced to ₹1.2 lakh crore.
While announcing the package, the government had said, “At present discoms have a total outstanding of ₹94,000 crore towards power generation firms (gencos)”.
However, later, States demanded that the package be extended to include outstanding dues towards power generation and transmission firms for the month of April and May as well.
A source said that an official communication in this regard has already been sent to the implementing state-owned non-banking finance firms Power Finance Corporation (PFC) and REC by the Ministry of Power.
The source further said now the respective boards of REC and PFC will approve the increase in liquidity package to about ₹1.2 lakh crore covering a period of dues till June this year, by the end of September.
As much as ₹ 68,000 crore has been sanctioned and about ₹25,000 crore disbursed to discoms under the package so far.
‘More States to tap’
The source further revealed that more States would avail the credit facility after the REC and PFC boards’ decision to raise the package.
PFC and REC would apprise States in this regard.
Some of the discoms were not eligible for getting loans under the package because they were not meeting working capital limit norms under Ujwal DISCOM Assurance Yojana (UDAY).
Working capital limit
In August, the Union Cabinet relaxed the working capital limit norms for discoms under UDAY to get loans as part of the liquidity infusion scheme.
Under UDAY, banks and financial institutions are restricted to lend working capital up to 25% of a discom’s revenue in the previous year.
Besides, discoms can get loan under the package against the receivables from State governments to clear their dues. But some discoms did not have headroom under both the provisions.
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