Dues & disputes: IPPs seek larger loan facility for discoms

The liquidity infusion scheme initially had a dimension of Rs 90,000 crore and it was meant to to cowl the dues until March 2020; it was later expanded embody overdue payments unpaid by discoms until the tip of June 2020.

With state-run electrical energy distribution corporations’ over-dues to non-public energy corporations rising 8% on yr to Rs 36,018 crore at April finish regardless of the Rs 1.25-lakh-crore PFC-REC mortgage facility on the discoms’ disposal, even the most recent package deal to bail out the ability sector is threatening to return a cropper. Unbiased energy producers (IPPs) have demanded an growth of the mortgage facility, whilst a big section of their receivables are disputed by the discoms.

The liquidity infusion scheme initially had a dimension of Rs 90,000 crore and it was meant to to cowl the dues until March 2020; it was later expanded embody overdue payments unpaid by discoms until the tip of June 2020.

“Contemplating the unfolding burden on the states’ funds at current, the extension of time protection of liquidity window to cowl dues until March 31, 2021, will present a fallback choice to needy states to offer money liquidity within the system,” Affiliation of Energy Producers (APP) stated in a letter to the Union energy ministry, requesting it to increase the ambit of the PFC-REC mortgage scheme.

Based on ICICI Securities, as a lot as Rs 75,555 crore had been disbursed to the states by FY21-end underneath the scheme. “The quantity nonetheless pending at current underneath the liquidity window could also be launched to the involved states with quick impact,” APP’s letter, reviewed by FE, added.

The second wave of the coronavirus has impacted the billing and assortment of discoms, and the scenario has grow to be graver as a consequence of decrease utilization by high-paying industrial and business classes, which contribute about 70% of the income of the discoms. “Though the nation is progressively popping out of the second Covid wave lockdown, discom receivable and payables are once more ballooning and liquidity infusion by central authorities of not less than Rs 50,000 crore will assist in decreasing the monetary stress within the system,” Debasish Mishra, chief of vitality, assets and industrial merchandise at Deloitte India stated.

Despite the fact that receivables of personal energy crops elevated at April finish, whole overdues stood was Rs 68,330 crore, down 9.6% from a yr earlier as as a consequence of central authorities energy stations fell 39% yearly to Rs 20,978 crore. The overall pending dues at April finish would have been greater if the disputed invoices of Rs 22,680 crore had been accounted for. The disputed quantity for central government-owned energy crops stood at Rs 1,511 crore, whereas for personal energy producers, the identical was a lot greater at Rs 21,157 crore. Overdues are outlined as pending receivables of 45 days or extra.