The outstanding fees of Andhra Pradesh discoms, approximately Rs 600 crore, to various developers of renewable energy have been cleared directly by the Power Finance Corporation (PFC) until March 2020, according to sources close to development.
The dues had begun to rise with the Andhra Pradesh government stopping payments to developers following a standoff between the two that arose after the new YSR Congress government led by Y. In May 2019, S. Jaganmohan Reddy came to power.
The new government argued that the former Telugu Desam government of N. Chandrababu Naidu had signed and refused to honor contracts with renewable energy developers for inflated tariffs. It wanted to re-negotiate all contracts at lower rates.
However, with the developers moving to the Andhra Pradesh High Court , the court, in December last year, ordered that all their outstanding fees should be paid, including setting the tariff at which payments should be made. Accordingly, in March of this year, Andhra Pradesh discoms paid part of Rs 600 crore to the developers.
Discoms, which also owe much more to conventional power developers, sought loans from PFC and the Rural Electrification Corporation (REC) to pay off their entire debt. “Andhra Pradesh discoms asked PFC and REC for a loan of Rs 6,600 crore, part of which would be used to pay solar and wind developers,” said the industry executive, asking for anonymity.
With the Andhra Pradesh Government’s standing guarantee for the loan, PFC and REC have agreed to provide it under the Atmanirbhar Bharat Abhiyan Scheme announced by Prime Minister Narendra Modi to help industry counter the Covid-19 crisis. However, they provided that the payments would be made directly to the developers concerned, without being routed through the discoms. Accordingly, PFC paid Rs 600 crore worth of renewable energy developers’ fees.
There are still tussles between Andhra discom and renewable energy developers. Developers argue that discomfort has been slowing down wind and solar power late. “They’ve been telling us for the past month that they’re not taking power because of the safety concerns of the grid,” said the above-mentioned guy.
