With banks and financial institutions refusing to extend any further loans to the Uttar Pradesh Power Corporation, which is battling to arrange extra electricity to meet peak summer demand, there is some help coming for the ailing corporation.
The UP government, the New Okhla Industrial Development Authority (Noida) and the Mandi Parishad have decided to together give about R1,000 crore to the cash-strapped UPPCL to meet its immediate financial requirements.
According to state government sources, while the UP government will shell out R500 crore in the form of an advance cash subsidy to UPPCL, Noida and the Mandi Parishad would extend loans of R250 crore and R200 crore, respectively, on a nominal interest rate. UPPCL has promised to repay the loan as soon as its financial restructuring package is cleared.
According to a senior UPPCL official, this is no reason to rejoice. ?It is not going to be party time. The money thus arranged would be just enough for survival. We need to pay off some power dues and we need cash to buy power from the exchanges. And once the FRP gets cleared, the loan from Mandi Parishad and Noida will be paid off,? he said. He expressed hope that the FRP will be cleared by May end.
A delegation of UPPCL officials met UP chief secretary Jawed Usmani and proposed that they be given some immediate help in the form of advance subsidy and loans to avert the crisis.
?Since banks and FIs are no longer ready to give loans to UPPCL due to its poor financial position, we requested the state government for assistance in improving the power supply,? said an official requesting anonymity.
The corporation gets a subsidy of R4,000 crore from the state budget. This amount is broken up into 12 instalments over the year. UPPCL has asked the state to give the subsidy in advance to allow it to start making some power purchases from external sources, including power exchanges.