It was informed in Parliament that nearly Rs.25,000 crore worth of loans have been disbursed to power distribution companies (discoms) under the government’s special liquidity infusion scheme, announced during the COVID-19 lockdown.
The government is infusing liquidity in the power sector through PFC Ltd and REC Ltd, to enable the power sector to main power supplies as cash flows came under the adverse impact of the COVID-19 lockdown.
Under this intervention, REC and PFC are extending special long-term transitions loans of up to ten years to discoms for liquidating their outstanding dues payable to generation and transmission utilities.
As against the liquidity infusion package of Rs.90,000 crore, loans worth Rs.70,590 crore were sanctioned up to September 16, 2020 while Rs.24,742 crore were already disbursed up to the same date.
There are unconfirmed reports suggesting that the quantum of this relief package may be extended to Rs.1,20,000 crore, though no official communication to this effect has yet been received.
The relief package of Rs.90,000 crore has been divided into two tranches of Rs.45,000 crore each.
Discoms need to give an undertaking to avail of assistance under this liquidity scheme. For the first tranche, the undertaking would entail, among others:
- Discoms to enable digital payments of electricity bills
- Discoms to enable self-assessment by consumers, to facilitate provisional billing
- State governments will provide an undertaking to liquidate payments due to discoms, on account of electricity dues of government departments/offices
For availing the second tranche of assistance, discoms will have to submit details of implementation of undertakings given at the time of the first tranche and will have to submit a plan, endorsed by the state government, to bring down AT&C losses over the next 3-4 years. This, in turn, will involve steps to reduce theft and to bring down gap between the Annual Cost of Supply (ACS) and Annual Revenue Realized (ARR).
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