The government is looking to arrange low-cost financing for its Rs 90,000 Crore Liquid Infusion Plan to prevent blackouts as troubled power generation plants run out of cash in the middle of a nationwide lockout. In addition to funding from multilateral agencies and institutions such as LIC, EPFO and NSSF, the Power Ministry sought bonds under a special window to the sector.
The loans are to be made available to Power Finance Corp (PFC) and REC Ltd, the two sector lending institutions in the Indian power sector, for onward concessional loans to state electricity distribution utilities to help them clear bills of power generation companies.
The Ministry of Power also sought to relax exposure standards for banks and financial institutions to lend to the state-run PFC and its subsidiary REC Ltd. A senior government official said that the proposals are under consideration by the finance ministry and that the final draft will have to be approved by the Union Cabinet. "The scheme needs access to cheap funds for which it needs support from the finance ministry. We hope it's going to happen soon. It's a big amount, so everyone needs to be on board, "the official said.
