According to Divakar Dev, chairman and managing director, REC, "Special financing schemes are being devised to assist the ailing state electricity boards to achieve their RE targets without causing further delays and defaults in repaying the loans".

The company however, is also taking precautions to ensure that its loans don't turn sticky. On one hand REC is providing bridge loan facility to the SEBs so that projects do not get delayed for want of a state government guarantee.

On the other hand, an escrow account is being opened to ensure that the bridge loan is repaid by the SEBs in time. "The RE projects keep languishing for want of state government guarantees which normally come after few months delay", said Dev.

Nine frequently defaulting SEBs owe Rs 7,800 crore to REC. These includes SEBs of UttarPradesh, Madhya Pradesh, West Bengal, Bihar, Orissa, Assam, Meghalaya, Haryana and Andhra Pradesh, which have defaulted on around Rs 2,500 crore worth of loans. REC has already signed agreements with the SEBs of Haryana and Orissa to open escrow accounts. The company is in the process of finalising the pact with Meghalaya's electricity board.

The REC has also given an open offer to all the SEBs to clear the pending applications for pumpset energisation. So far, SEBs have been going slow on pumpset energisation due to financial constraints. For instance, the Rajasthan's Electricity Board has 2.5 lakh pumpset energisation applications pending, of which, the board has agreed to clear only 25,000 applications in 1998-99.

In Maharashtra, 1.95 lakh applications are pending while MSEB has set a target of providing energisation to 60,000 pumpsets. However, until recently the board had completed only 22 pumpset energisations. Another area of focus for the REC is village electrification.

The company has set atarget of electrifying 3,000 villages during the year although 84,757 villages are yet to get an electricity connection in India.

"We have also started providing finance for systems improvement programmes", said Dev. These programmes include improvement of quality of electricity supply by putting new transformers and augmenting the distribution set-up.

The company has decided to allocate around Rs 800 crore alone for financing such programmes. "These programmes will assist in saving electricity generally lost in transmission", he said.

"Availability of power is not a problem everywhere. For instance, in Delhi which recently sufferred frequent load-shedding, the situation would have been different if there was proper distribution set-up", he added. REC has also identified factors which cause delays in implementing the RE programmes.