Center for offering quick short-term loans to nightclubs; move to help companies clear Rs 1 lakh crore dues | Photo credit: BCCL
New Delhi: The government is actively considering offering quick short-term loans to electricity distribution companies (discoms) as their accumulated electricity bills payable to production houses are approaching Rs 1 lakh crore.
Quoting an unnamed senior government official, HEY reported that the state-controlled Rural Electrification Corp (REC) plans to offer short-term bill-paying loans to private and public electricity distribution companies.
“The loans will allow distribution companies to clear their debts to power plants and transmission costs on time,” the official was quoted as saying by the financial daily. He pointed out that the credits will be within working capital limits under the other central schemes including Ujwal Discom Assurance Yojana (Uday) and will also be granted on the basis of state government guarantees.
Recently, power distribution companies in states like Andhra Pradesh sought financial assistance from the Center as high spot electricity prices soared due to a crisis caused by the shortage of coal. in power plants. Importantly, the incessant rains in some of the country’s major coal-producing regions have played a spoilsport role in prolonging the shortage of coal stocks at power plants.
Last year, the Center announced a mega cash injection of Rs 90,000 crore into fund-starved discoms as part of a stimulus package aimed at reviving the country’s Covid-battered economy.
On Wednesday, average spot prices on the Indian Energy Exchange daily market jumped to Rs 6 per unit on strong demand from many states including Andhra Pradesh, Gujarat, Tamil Nadu and Maharashtra. At the end of last week, the rains had softened the prices to Rs 4 per unit.
The publication mentioned that data from the Ministry of Energy’s Praapti portal showed that the accrued dues at the beginning of October were around Rs 93,500 crore and were likely to hit Rs 99,000 crore by the end of the month. end of the month.
Ashok Khurana, managing director of the Association of Power Producers, told the daily: “It is understood that the Ministry of Energy is planning to put in place a program that will ease the liquidity situation of discoms and help them to pay their electricity bills.