PFC, REC disburse Rs 23,500 crore to state discoms under liquidity infusion scheme

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October 15, 2020 4:15 AM

Uttar Pradesh had sought a loan of about Rs 21,185 crore, Karnataka and Telangana about Rs 7,000 crore each and Rajasthan about Rs 4,000 crore.

Uttar Pradesh had sought a loan of about Rs 21,185 crore, Karnataka and Telangana about Rs 7,000 crore each and Rajasthan about Rs 4,000 crore.Uttar Pradesh had sought a loan of about Rs 21,185 crore, Karnataka and Telangana about Rs 7,000 crore each and Rajasthan about Rs 4,000 crore.

The Power Finance Corporation (PFC) and REC have disbursed around Rs 23,500 crore to state power distribution companies (discoms) as a part of their first tranche payment under the liquidity infusion scheme announced by the Central government in May.

PFA and REC had sanctioned Rs 45,000 crore under the first of the scheme, from which Uttar Pradesh has received the highest disbursal of around Rs 10,500 crore followed by Telangana (Rs 6,300 crore), Andhra Pradesh (Rs 3,300 crore), Rajasthan (Rs 2,030 crore), Punjab (Rs 1,000 crore), West Bengal (Rs 450 crore), and Manipur (Rs 55 crore), according to the company sources.

Uttar Pradesh had sought a loan of about Rs 21,185 crore, Karnataka and Telangana about Rs 7,000 crore each and Rajasthan about Rs 4,000 crore. The states have to guarantee loans taken by discoms under the scheme, and give certain undertakings to avail the loan. Both PFC and REC will equally disburse the loans under the scheme.

A senior REC official said, there are small issues at certain state government levels, which are holding up the disbursements and the matter is being followed up vigorously with states to meet the compliance requirements for disbursements. “We are hopeful that in the running third quarter (October-December 2020) all the first tranche disbursements and a majority of the second tranche sanctions and some of the disbursement will happen. Andhra Pradesh and Telengana have submitted details of the second tranche requirements,” the official said.

“We believe the one-time approval granted by the union cabinet to discoms to borrow above the 25% revenue limit on working capital loans will increase the overall size of the scheme to over Rs 100,000 crore, as many states such as Tamil Nadu and Bihar would become eligible under the scheme,” the REC official said.

Discoms of Tamil Nadu and Bihar had sought relaxation of the working capital limits under the Ujwal Discom Assurance Yojna (UDAY) scheme, which restricted working capital to 25% of revenue in the previous year.

As per the latest PFC report on the performance of state power utilities for FY19, the aggregate losses of all state power utilities rose to Rs 52,838 crore in FY19. Karnataka, Maharashtra, Rajasthan, Gujarat, Delhi, Haryana, West Bengal, Chhattisgarh, Assam, and Tripura were the only profitable states during the year.

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