Five states to receive second tranche of PFC-REC loan

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March 9, 2021 1:40 AM

The major beneficiaries which have been sanctioned loans under the scheme include Tamil Nadu (Rs 30,230 crore), Uttar Pradesh (Rs 27,432 crore), Maharashtra (Rs 14,310 crore), Telangana (Rs 12,652 crore), Karnataka (Rs 7,247 crore) and Andhra Pradesh (Rs 6,835 crore).

The industry has requested the RBI to articulate a road map for NBFCs in the upper layer (NBFC-UL) to convert themselves into banks.The industry has requested the RBI to articulate a road map for NBFCs in the upper layer (NBFC-UL) to convert themselves into banks.

Five states have filed their requests for the second tranche of loans under the Rs 1.25-lakh-crore liquidity infusion scheme which was announced by the Centre under the Atmanirbhar Bharat package to clear the dues of power distribution companies (discoms) to electricity generators.

The second tranche of disbursals will be released soon for Andhra Pradesh, Telangana, Rajasthan, Bihar and Manipur, Union power minister RK Singh told FE. Uttar Pradesh and Tamil Nadu are expected to present their detailed plan in the coming week to avail the second tranche, the minister added.

The major beneficiaries which have been sanctioned loans under the scheme include Tamil Nadu (Rs 30,230 crore), Uttar Pradesh (Rs 27,432 crore), Maharashtra (Rs 14,310 crore), Telangana (Rs 12,652 crore), Karnataka (Rs 7,247 crore) and Andhra Pradesh (Rs 6,835 crore).

As much as Rs 46,074 crore has been disbursed to all the discoms by PFC-REC as on January-end under this scheme.
Funding to discoms under the liquidity infusion scheme are designed to be done in two tranches, both special long-term transition loans of tenures up to 10 years.

The release of the first component of the loan is contingent on the respective state government undertaking to clear the departmental dues to its discom, and putting in place a credible mechanism to release the subsidies — meant for the consumers but routed through the discoms — in advance. The discoms will also have to come up with a plan, endorsed by the respective state governments, to reduce their losses.

Stressed discoms cannot raise funds at cheaper rates, even though interest rate on the special PFC-REC loan will be 150 bps higher than the rate at which they borrow. “Only those states which have complied with the conditions while receiving the first tranche will be eligible to get the second tranche of the loan,” Singh said. Overdues — outstanding of 45 days or more — owed to generators by discoms across the country stood at Rs 1.27 lakh crore at January end, 27% higher than the same period in last year.

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