Saturday, June 25, 2022

EXCLUSIVE: Here’s the set of riders discoms will have to fulfil to avail Rs 90,000-crore package

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  • The long-term transition loan only be extended to borrowers who do not have any overdues in the books of PFC and REC

  • The payment shall be released directly to gencos, IPPs, transcos based on the authorisation of discoms

New Delhi: The Rs 90,000-crore relief package extended by the Central government to ailing discoms (power distribution companies) as part of the Rs 20 lakh crore package will be released in two tranches by state-run PFC and REC. It will also have a number of pre-disbursement and post-disbursement conditions for both discoms and respective state governments, a document reviewed exclusively by PSU Watch has shown. The package has been extended to ailing discoms in order to allow them to clear dues owed to state gencos (power generation companies) and transcos (power transmission companies).

Rs 90,000 crore package to be co-funded by PFC and REC

The long-term transition loan will be co-funded by PFC and REC and will only be extended to borrowers who do not have any overdue in the books of the two state-run companies. “Borrower should not have any overdues in the books of PFC/REC. The Loans under the scheme will be Co-funded by PFC and REC in equal proportion,” the document said.

“Based on receivables of the discoms from the state govt departments, companies, bodies, ULBs, PRIs, etc in the form of electricity bill dues and undisbursed subsidy restricted to outstanding dues of CPSU gencos and transcos, IPPs and RE Generators as on 31st March 2020. 50 percent of eligible loan amount shall be provided in Tranche –I and balance 50 percent in Tranche–II to the utilities. UDAY limits shall not be applicable for these loans,” it added.

Discoms will have to provide details of receivables to PFC, REC

Discoms will have to furnish details of receivables from the state government in the form of electricity bill dues of state government departments, companies, bodies, ULBs, PRIs, etc and un-disbursed subsidy. “Electricity duty payable to state government, if any, shall be netted off while determining the extent of financial assistance,” the document said.

Distribution companies will also be required to provide the outstanding dues of CPSU gencos and transcos, IPPs and RE (Renewable Energy) generators as on March 31. They will also submit an undertaking that the amount financed under this scheme is not financed by other financial institutions and banks under any other scheme.

Pre-disbursement conditions to be met for receiving first tranche

Discoms will have to enable digital payments of electricity bills, self-assessment by consumers by making provision for the consumer to send meter reading by taking a picture of the meter or SMS to facilitate provisional billing. The bills shall be settled and accounted once the meter is read. The amounts paid by consumers shall be set off. They will have to install smart prepaid or prepaid meters in government departments, attached offices so that in future the electricity dues of discoms are paid regularly. 

Payments will be released to gencos, transcos, IPPs directly

“The payment shall be released directly to CPSU GENCOs/RE GENCOs/IPPs/ CPSU TRANSCOs based on the authorisation of DISCOMs in this regard,” the document said. The state government guarantee shall cover the loan amount along with interest and any other charges towards the loan.

The tenor of the loan will be up to a maximum period of 10 years, including moratorium not exceeding three years. The moratorium shall only be on the payment of the principal. Interest shall be serviced regularly on a monthly basis.

“However, the period of loan may be decided on a case-to-case basis in line with the requirement and as agreed by State Govt. Depending upon the tenor of the loan, the period of moratorium shall be decided on the merits of each case. However, the decision of PFC shall be final in this regard. After the moratorium period repayment of the loan (Principal and Interest) will be made in equated monthly installments,” the document said.

Pre-disbursement conditions for second tranche

For availing the second tranche of payment, discoms will have to show that the undertakings given at the time of Tranche-I have been implemented or the implementation is in progress. They will also have to submit a plan, endorsed by the state government in consultation with the Ministry of Power, to bring down their AT&C losses and ACS-ARR gap over the next three to four years.

Discoms will also submit reports on a half-yearly basis authorised by Director Finance/ key management personnel regarding outstanding power purchase bills, outstanding dues from state government departments and outstanding subsidy receivable for monitoring purposes. The loan can also be recalled by PFC in case of non-adherence.

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