New Delhi, August 10: Until now, as much as Rs 68,000 crore loans under Rs 90,000 liquidity package announced for the stressed power distribution utilities have been approved which is expected to establish buoyancy in the industry. In May, Finance Minister Nirmala Sitharaman declared the infusion of Rs 90,000 crore liquidity into cash-strapped discoms, which is facing a market slump due to the COVID-19 lockdown.
A source said, “State-run non-bank finance companies REC Ltd and Power Finance Corporation (PFC) have so far approved Rs 68,000 crore worth of loans under the Rs 90,000 crore liquidity infusion package for discoms announced in May.”
REC Ltd had said in a regulatory filing earlier this week, “As part of this liquidity package to discoms, the firm has already approved amounts of more than Rs 30,000 crore by July 31, 2020.”
The loans under the package will be in equal proportion co-funded by PFC and REC. The loans will be payable in two equal tranches. The package was released on 13 May 2020.
The source further informed, “The first tranche of credit has also been released to Andhra Pradesh, Telangana and Uttar Pradesh.”
“The Rs 90,000 crore package would be fully utilised after Tamil Nadu (Rs 20,000 crore) and Bihar (Rs 3,500 crore) submit their formal proposals under the package,” the source added.
Uttar Pradesh tops the list to pursue the highest loan under the Rs 20,000 crore package so far, followed by Telangana (Rs 12,000 crore), Karnataka (Rs 7,000 crore), Andhra Pradesh (Rs 6,000 crore), and Maharashtra (Rs 5,000 crore). Punjab, Rajasthan and Jammu & Kashmir searched for 4,000 rs of crore each.
The package was for discoms to pay off outstanding dues up to March this year. While announcing the package, the government had said, “At present the discoms have a total outstanding of Rs 94,000 crore towards power generation firms (gencos).
However, later states have requested that the package be expanded to include outstanding dues to power generation and transmission firms for April and May.
In a conference with his state’s counterparts earlier in July, Power and New and Renewable Energy Minister R K Singh noted that there was demand from the states for over Rs 93,000 crore under the package.
He had also told them that April and May ‘s outstanding dues would also be included in the package. The gross outstanding dues later increased in May to Rs 1.27 lakh crore and in June this year to Rs 1.33 lakh crore according to data on the PRAA portal.
The government was mulling after witnessing increased demand for the credit under the liquidity package to hike it to Rs 1.25 lakh crore.
“The power ministry has not given formal orders to raise the package so far. The two companies are considering state proposals for loans under package with an overall cap of Rs 90,000 crore”, the source said.
Payment Ratification And Analysis in Power Procurement (PRAA) was established to bring about accountability and transparency in generator invoicing. The PRAA platform was introduced in May 2018 to offer transparency between generators and discoms in power purchase transactions.
