With state-run electricity distribution companies’ over-dues to private power companies rising 8% on year to Rs 36,018 crore at April end despite the Rs 1.25-lakh-crore PFC-REC loan facility at the discoms’ disposal, even the latest package to bail out the power sector is threatening to come a cropper. Independent power producers (IPPs) have demanded an expansion of the loan facility, even as a large segment of their receivables are disputed by the discoms.
The liquidity infusion scheme originally had a size of Rs 90,000 crore and it was meant to to cover the dues till March 2020; it was later expanded include overdue bills unpaid by discoms till the end of June 2020.
“Considering the unfolding burden on the states’ finances at present, the extension of time coverage of liquidity window to cover dues till March 31, 2021, will provide a fallback option to needy states to provide cash liquidity in the system,” Association of Power Producers (APP) said in a letter to the Union power ministry, requesting it to expand the ambit of the PFC-REC loan scheme.
According to ICICI Securities, as much as Rs 75,555 crore had been disbursed to the states by FY21-end under the scheme. “The amount still pending at present under the liquidity window may be released to the concerned states with immediate effect,” APP’s letter, reviewed by FE, added.
The second wave of the coronavirus has impacted the billing and collection of discoms, and the situation has become graver due to lower usage by high-paying industrial and commercial categories, which contribute about 70% of the revenue of the discoms. “Although the country is gradually coming out of the second Covid wave lockdown, discom receivable and payables are again ballooning and liquidity infusion by central government of at least Rs 50,000 crore will help in reducing the financial stress in the system,” Debasish Mishra, leader of energy, resources and industrial products at Deloitte India said.
Even though receivables of private power plants increased at April end, total overdues stood was Rs 68,330 crore, down 9.6% from a year earlier as due to central government power stations fell 39% annually to Rs 20,978 crore. The total pending dues at April end would have been higher if the disputed invoices of Rs 22,680 crore had been accounted for. The disputed amount for central government-owned power plants stood at Rs 1,511 crore, while for private power producers, the same was much higher at Rs 21,157 crore. Overdues are defined as pending receivables of 45 days or more.
