PFC-REC loan amount for discoms may increase to Rs 1.25 lakh crore

A sum of Rs 20,000 crore of loans from the scheme have been approved as of now.

The quantum of loan amount for state-run distribution companies (discoms) offered by the Centre may be increased to Rs 1.25 lakh crore from the Rs 90,000 crore designated earlier on the request of the states, Union power minister RK Singh said.

The Centre had announced the liquidity infusion scheme to clear the dues owed by discoms to the private and central government-owned power generating companies till March, but several states, citing the discoms’ additional stress due to the coronavirus lockdown, want the loan to take care of their outstanding till June, the minister added.

Singh was addressing the power ministers of the state governments through video conference. A sum of Rs 20,000 crore of loans from the scheme have been approved as of now.

The Centre and the states also discussed the new scheme to revamp the discoms, which will subsume the existing Central government schemes for the electricity sector such as the Integrated Power Development Scheme (IPDS) and the Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY).

The cumulative outlay of these two schemes (launched in FY15) is Rs 1.1 lakh crore.

The minister said that the new scheme would give more flexibility to the states about how they want to use the funds to revive their discoms. However, these state-run entities will have to work out a trajectory for loss reduction and funds — in the form of loans and grants — under this scheme would be released only if the trajectories are adhered to.

The contentious issue of the proposed Electricity Act amendments was also discussed in the conference, after which it was decided that the current draft version of the amendments will be modified after taking into consideration the suggestions given by all the stakeholders including the state governments. As FE reported earlier, after several states had protested against the proposed amendments, alleging that the new provisions dilute their authority to appoint electricity regulators, the Centre has started considering to continue with the existing framework of separate selection committees for each state.