Private power producers want govt to fast-track discom funding package

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Published: May 9, 2020 3:20 AM

Power plants across the country currently have coal stock to run their plants for 31 days on an average.

Amid the lockdown to contain the outbreak of the coronavirus, discoms are facing revenue shortage with rising difficulties in meter reading exercises and payment collection.Amid the lockdown to contain the outbreak of the coronavirus, discoms are facing revenue shortage with rising difficulties in meter reading exercises and payment collection.

Facing extreme liquidity crunch, independent electricity generators want the government to expedite the process of injecting liquidity in the cash-strapped power distribution companies so that they can clear their dues to the plants at the earliest.

In separate letters sent to the ministry of power and the Prime Minister’s office, the Association of Power Producers has pointed that running power plants is getting more difficult by the day as power plants need to make advance payments for coal and railway freight.

“Many of the generators have now reached a stage where they do not have money to buy coal, or pay salaries or pay for transport charges and LTA (transmission) charges,” the letters, reviewed by FE, from power producers to the government said. “For these generators, once the coal stocks at the plants are depleted, they may have no option but to shut down the plant till their liquidity situation improves,” the letters pointed.

Power plants across the country currently have coal stock to run their plants for 31 days on an average.

Amid the lockdown to contain the outbreak of the coronavirus, discoms are facing revenue shortage with rising difficulties in meter reading exercises and payment collection. This, in turn, is raising the risks of under-paying power generators. Overdues — payment default of 60 days or more — from discoms to power producers were already at Rs 79,829 crore at March-end. The total due amount would be even higher if the current unpaid invoices of major power players such as Adani Power and GMR Energy are counted.

As FE recently reported, the government is planning to extend a fresh loan of Rs 90,000 crore by sector-specific lenders PFC-REC to discoms, which according to sources, would be done in two tranches of Rs 45,000 crore each, both special long-term institution loans of tenures up to 10 years. Power producers have also reiterated their demand to the government to direct Coal India to allow coal supply on credit, which would lower their burden of additional working capital loans.

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