PFC, REC have sanctioned loans of Rs 1.25 lakh cr, disbursed Rs 46,074 cr to discoms: RK Singh

• Under Budget 2021, the government has increased the outlay of the discom reform scheme to Rs 3.06 lakh crore

• The minister said that REC has sanctioned loans totalling Rs 65,932 crore, while PFC has sanctioned Rs 59,067 crore to discoms so far

New Delhi: State-run Power Finance Corporation (PFC) and REC Limited have so far sanctioned loans worth Rs 1.25 lakh crore and sanctioned Rs 46,074 crore to discoms under the liquidity infusion scheme announced by the Centre in May 2020, said Power Minister RK Singh. The scheme mandated PFC and REC to provide funding to discoms to the tune of Rs 90,000 crore for the clearance of their outstanding dues towards CPSU GENCOs and TRANSCOs, IPPs and RE Generators as on March 30, 2020. However, based on requests received from discoms, the Ministry of Power extended the outstanding dues timelines to June 30, thereby taking the overall value of the scheme to around Rs 1.2 lakh crore.

And recently, under Budget 2021, the government has increased the outlay of the discom reform scheme to Rs 3.06 lakh crore. In a written response submitted in the Rajya Sabha, the minister said that REC has sanctioned loans totalling Rs 65,932 crore, while PFC has sanctioned Rs 59,067 crore to discoms so far. As far as disbursements are concerned, REC has disbursed Rs 24,204 crore and PFC Rs 21,870 crore. 

Reforming discoms: Beneficiary states

According to the information shared by the minister, Tamil Nadu, Uttar Pradesh (UP), Telangana, Karnataka, Andhra Pradesh, Maharashtra and Jammu and Kashmir (J&K) are some of the states that are the biggest recipients under the liquidity infusion scheme. Tamil Nadu is the state to have received the biggest chunk of loans with Rs 30,230 crore sanctioned so far, followed by UP, which has been allocated Rs 27,432 crore. Maharashtra has been allocated Rs 14,310 crore, Telangana Rs 12,652 crore, J&K Rs 11,024 crore, Karnataka Rs 7,247 crore and Andhra Pradesh Rs 6,835 crore.

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"The disbursement under the long term transition loans have been linked with DISCOMs undertaking certain reform measures such as installing pre-paid smart meters, as well as laying down the trajectory for preventing AT&C losses, ACS-ARR gaps, recovery of subsidy and government dues," Singh told the Rajya Sabha.

The backdrop

Under this liquidity infusion scheme, REC and PFC are extending special long-term transition loans upto 10 years to discoms for liquidating outstanding dues of Central Public Sector Undertakings (CPSUs) Generation (Gencos) and transmission companies (Transcos), Independent Power Producers (IPPs) and Renewable Energy (RE) generators. The government has also approved a proposal to allow utilities in states, which do not have adequate headroom against state receivables or working capital limits under UDAY, to avail the benefits of the liquidity infusion scheme.

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