Loans Worth Rs 1.25 Lakh Crore Sanctioned Under Discoms Liquidity Package
Loans worth nearly Rs 1.25 lakh crore have been sanctioned so far by state-owned non-banking finance firms Power Finance Corp. and REC Ltd. under the liquidity package for stressed power distribution utilities, Parliament was informed on Tuesday.
In May, Finance Minister Nirmala Sitharaman had announced Rs 90,000 crore liquidity infusion into cash-strapped discoms facing demand slump due to the Covid-19 crisis. This package was later increased to Rs 1.2 lakh crore by the Ministry of Power.
Under the liquidity package loans worth Rs 1,24,999 crore -- including Rs 65,932 crore by REC and Rs 59,067 crore by PFC -- has been sanctioned as of January 27, 2021, Power Minister RK Singh said in a written reply to the Rajya Sabha.
According to the reply, an amount of Rs 46,074 crore -- including Rs 24,204 crore by REC and Rs 21,870 crore by PFC -- has been disbursed under the package to states.
The loans under the package are co-funded by PFC and REC in equal proportion.
Among the states which sought finance under the scheme, Tamil Nadu tops the chart with Rs 30,230 crore sanctioned loan followed by Uttar Pradesh at Rs 27,432 crore and Maharashtra at Rs 14,310 crore, as per the minister's reply.
"So far, loans to the extent of Rs 1,25,000 crore have already been sanctioned and Rs 46,074 crore have been disbursed.
"The disbursement under the long term transition loans have been linked with DISCOMs undertaking certain reform measures such as installing pre-paid smart meters, as well as laying down the trajectory for preventing AT&C losses, ACS-ARR gaps, recovery of subsidy and government dues," Singh said in a separate reply to the House.
Under the liquidity infusion scheme of the Centre, REC and PFC are extending financial assistance at a concessional rate of interest. The package was announced on May 13, 2020. The discoms require liquidity to pay off their bills to the gencos (generation companies) and transcos (transmission firms).
According to the PRAAPTI portal (Payment Ratification And Analysis in Power procurement for bringing Transparency in Invoicing of generators), discoms' total outstanding dues as of December 2020 stand at over Rs 1.35 lakh crore.
The package is aimed to help discoms to reduce their outstanding dues. Besides, it would reduce stress on the power gencos and transcos as their payments are stuck with discoms.