The Power Finance Corporation (PFC) has agreed to consider sanctioning transition loans of R17,300 crore to help debt-ridden power distribution companies meet their cash gap as an alternative to participating in the debt restructuring plan prepared by the Centre.
The PFC board approved a proposal to this effect at its meeting on Wednesday. The company has extended loans worth R7,000 crore to discoms, of which R1,890 crore is for the short term.
?Instead of participating in the loan restructuring plan, we will give small amounts of transition loans to the six states. There will be a three -year moratorium and, after that, the loan will have to be repaid in seven years,? said PFC chairman Stanam Singh.
Discoms from six states ? UP, Punjab, Haryana, Rajasthan, Andhra Pradesh and Tamil Nadu ? have raised the requirement of transition loans from PFC.
UP has submitted a proposal to PFC for a R1,800-crore loan, Punjab R1,000 crore, Haryana R2,000 crore, Rajasthan R4,500 crore, Andhra Pradesh R3,000 crore and Tamil Nadu R5,000 crore. ?PFC has not written off any loan to discoms. There is no non-performing assets on state utilities,? said Singh.
