Government to give short-term loans to coal-based plants

NEW DELHI: As the electricity crisis deepens in the country, power ministry on Wednesday decided to arrange short-term loans for imported coal-based plants (ICB), which are under stress or in NCLT.  The ministry said these plants need working capital to buy coal and start generating power in order to restart their operations.

“Union Power Ministry has directed Power Finance Corporation (PFC) and Rural Electrification Corporation (REC Ltd) to take necessary action to arrange short term loans for a period of six months with adequate safeguards for ICB plants, which are under stress or in NCLT, at the earliest,” said the ministry in a statement.

The government has been taking various steps to tackle the ongoing power crisis, which arose due to coal shortage. The ministry on May 5, 2022, issued directions to all imported coal-based plants (ICB) under Section 11 of the Electricity Act, 2003 to operate and generate power to their full capacity. It has asked for projects, which are stressed or under NCLT.  

At the same time, it also directed that all gencos based on domestic coal will have to import at least 10% of their fuel requirements. These decisions, the ministry said, will ensure that additional electricity is produced through imported coal and will be a net addition.  “Since domestic coal supply is constrained, therefore, it is imperative that all ICB plants should run to meet the power requirements of the country,” reads the order of the ministry.