Power Minister R K Singh has directed state-run Rural Energy Corporation (REC) and Power Finance Corporation (PFC) not to grant loans to Discoms which are making heavy losses unless they draw up a road map for reducing them.
PTI
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Power Minister R K Singh has directed state-run Rural Energy Corporation (REC) and Power Finance Corporation (PFC) not to grant loans to Discoms which are making heavy losses unless they draw up a road map for reducing them.
Singh took a review meeting of the two financing arms of the Power Ministry – REC and PFC yesterday, the power ministry said in a statement.
It said he has directed the two institutions that before granting of loan either for capital expenditure or for non-capital expenditure, the adherence to prudential norms must be carefully observed.
Many distribution companies (Discoms) have been making heavy transmission and distribution (T&D) losses and it may be difficult for them to repay their loans, he said.
The loans, he said, should not be granted until and unless they draw up a road map for reducing the losses over a definite time-frame (not more than 2 years), and are able to show that they are taking action in accordance with the road map.
