The Union Cupboard is very likely to approve subsequent week a deal for discoms reeling underneath earnings decline thanks to reduced electrical power demand amid the coronavirus lockdown, like placing up of an choice investment decision fund to spend off their dues in direction of electrical power technology organizations.
“The Cupboard in the coming week can approve a deal for electrical power distribution utilities (discoms) which are underneath stress thanks to reduced demand and money crunch,” a source advised news agency PTI.
“The deal may include things like producing an alternate investment decision fund to spend off dues on behalf of the discoms to gencos. The discoms may be billed nominal desire fee and administrative bills on that,” he included.
The deal may also include things like ways like instructions to the state and central electrical power regulators to lessen electrical power traiff, the source sad.
The payment of dues would support distribution organizations (discoms) to boost their electrical power load (provides) and be certain 24X7 uninterrupted electrical power offer.
According to government knowledge, discoms owe Rs 92,602 crore to electrical power technology organizations (gencos) as of February this yr.
A report by field body CII had said discoms are very likely to undergo a net earnings decline of all around Rs thirty,000 crore and liquidity crunch of about Rs 50,000 crore thanks to the coronavirus-induced nationwide lockdown.
In its report introduced on Friday, CII had proposed host of steps like effortless credit score facility for discoms (from PFC and REC) to spend off its dues to gencos, reduced tariff primarily for industrial and business customers and deferral of indirect taxes like electrical power obligation and coal cess.
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It said the electrical power sector, one particular of the necessary services underneath the lockdown till Might 3, is battling the twin concerns of demand and liquidity compression.
Hottest knowledge from Energy Technique Procedure Company Ltd (POSOCO) indicated that complete demand for each week among March 23 and April 12 was eighteen BU (billion models), in comparison to 23 BU all through the week of March 9-fifteen (in advance of ‘Janata Curfew’ and lockdown) — a twenty five-28 for each cent reduction in demand.
Additional extension of the lockdown could consequence in additional demand compression of fifteen to twenty BU, implying a net earnings decline of Rs twenty five,000 to Rs thirty,000 crore for the discoms, it had said.
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This will even further boost the liquidity crunch to Rs 45,000 to 50,000 crore, in addition to the Rs 90,000 crore dues pending by the discoms to creating organizations pre-lockdown.
Earlier in the week, Renewable Vitality Secretary Anand Kumar had said, “We are planning to generate an choice investment decision fund that will support to give load and financial support to discoms and clear the thanks to be paid out to builders and generators. Our effort and hard work is to launch utmost thanks payments from discoms to the electrical power generators,”
“We want to make certain that our electrical power offer and renewable electrical power are secured and not compromised. We experimented with to clear all the financial dues of the generators and builders to boost the capital out there with them,” Kumar had said all through a webinar.