Maharashtra electricity company clears dues of Rs 4000 crore to IPPs

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Published: April 10, 2020 1:50:39 AM

MSEDCL owes state run power producer Mahagenco around Rs 7,000 crore, which it plans to pay in due course along with Rs 200 crore of wind power producers' outstanding loans, which is held up for some outstanding issues.

Power demand in India has fallen over 26% since March 24, the day the lockdown was announced.Power demand in India has fallen over 26% since March 24, the day the lockdown was announced.

The Maharashtra State Electricity Distribution Company (MSEDCL) has paid the entire Rs 4,000 crore dues to the independent power producers (IPPs) to help the power generators negotiate the liquidity crunch due to lockdown in the country.

MSEDCL raised Rs 4,000 crore from the State Bank of India (SBI) in the last week of March to pay the power suppliers who had receivables pending for up to six months.

A senior MSEDCL official told FE that they raised the fund to help reduce the pain of power producers who are not able to generate power at full capacity due to sharp reduction in demand from the industrial and commercial consumers, comprising of around 45% of power consumption.

Power demand in India has fallen over 26% since March 24, the day the lockdown was announced.

“We took Rs 4 000 crore from SBI in the last week of March at 8.45% which was one of the lowest rate we have got. The lowest rate on the long term loan that we have got was 8.20%. Our working capital loans are at an average of 7.95%,” the official said.

MSEDCL owes state run power producer Mahagenco around Rs 7,000 crore, which it plans to pay in due course along with Rs 200 crore of wind power producers’ outstanding loans, which is held up for some outstanding issues.

“We will look at what the requirement of Mahagenco is, and the immediate dues coming up for payments. We will pay them accordingly. Everyone has to work with bare minimum. We will ensure there are no defaults. Now, with the government of India support also coming as loans from REC & PFC, there should be no reason for any default,” the official said.

According to the PRAAPTI portal, the discoms at the national level owe power producers close to Rs 96,360 crore as of February end. This is a massive 133% increase over the same period a year ago, reflecting the stress in the sector.

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