The government is actively considering providing offer quick short-term loans to electricity distribution companies (discoms) as their accumulated power bills payable to generating houses are approaching Rs 1 lakh crore.
Citing an unnamed senior government official, ET reported that state-controlled Rural Electrification Corp (REC) is planning to offer short-term loans for bill payment to private as well as state-run power distribution companies.
“The loans will enable the distribution companies to clear their dues to power plants and transmission charges in time,” the financial daily quoted the official as saying. He pointed out that the credits will be within the working capital limits under the other central schemes including Ujwal Discom Assurance Yojana (Uday) and will also be given based on state government guarantees.
Recently, power distribution companies from states like Andhra Pradesh have sought financial help from the Centre as high spot electricity prices soared because of a crisis caused by coal shortage at power stations. It is important to note that incessant rains in some of the country’s major coal-producing regions have played a spoilsport in extending the shortage of coal stocks at power plants.
Last year, the Centre had announced a mega Rs 90,000 crore liquidity infusion into fund-starved discoms as part of a stimulus package to revive the country’s Covid-battered economy.
On Wednesday, average spot prices on the day-ahead market of the Indian Energy Exchange jumped to Rs 6 per unit because of high demand from many states, including Andhra Pradesh, Gujarat, Tamil Nadu, and Maharashtra. Late last week, rains had softened the prices to Rs 4 per unit.
The publication mentioned that the Power Ministry’s Praapti portal data demonstrated that the accumulated dues at the beginning of October were around Rs 93,500 crore and were likely to touch Rs 99,000 crore by the month-end.
Ashok Khurana, director general of Association of Power Producers, told the daily: “It is understood that the power ministry is thinking of bringing a scheme which will ease the liquidity position of discoms and help them to pay their power bills.”
