The Delhi Government has given permission to the three privately owned power distribution companies (discoms) to make use of the special discomfort loan scheme announced under the Atmanirbhar Bharat package announced by the Ministry of Finance.
Since the loan will require a State guarantee and Delhi is a Union territory, the Ministry of Home Affairs (MHA) has written to provide a State guarantee on behalf of Delhi.
If authorised, Delhi discoms will be the first to apply for this loan. In its 15-point plan to improve the economy, the finance minister proposed a special liquidity injection scheme for the endemic power distribution market.
The Center hopes to infuse near Rs 90,000 crore into discomfort. The loan is to pay strictly the fees of power generation and transmission companies.
The loan will be disbursed by Power Finance Corporation (PFC) and Rural Electrification Corporation.
The three discoms — Reliance Infrastructure-owned BSES Rajdhani Power (BRPL), BSES Yamuna Power (BYPL) and Tata Power Delhi Distribution (TPDDL)—have requested a loan of Rs 6,350 crore. It will be used to clear fees for the two Delhi-owned power generation units — Indraprastha Power Generation Company and Pragati Power Corporation — and Delhi Transmission.
“Due to power purchase costs and significant drop in collection efficiencies from consumers due to Covid-19 outbreak, the sector will require liquidity infusion for sustenance. Delhi discoms have requested a loan from PFC under the proposed liquidity injection package of Rs 90,000 crore for meeting liquidity crunch due to the impact of Covid-19,” said the Delhi government in its letter to the MHA.
Of the total loan requested, BRPL has asked Rs 3,050 crore, BYPL Rs 2,300 crore and TPDDL Rs 1,000 crore to repay the main outstanding charges for power generation units in Delhi.
Unlike the previous discomfort reform scheme, the current one does not involve any debt takeover by the state government, making it easier for private discomforts to participate. Compared to the average performance of state-owned discoms across the country, the three private discoms in Delhi have improved operational and financial parameters.
