Loans worth around Rs 70,000 crore sanctioned to discoms under liquidity package, says government

New Delhi: As much as Rs 70,590 crore worth of credit has been sanctioned to discoms under the liquidity package for payment of dues by these utilities, Parliament was informed on Sunday.

Finance Minister Nirmala Sitharaman in May this year had announced a Rs 90,000 crore liquidity infusion into cash-strapped discoms for clearing their outstanding dues till March 2020.

Now, the government is in the process of enhancing this package to Rs 1.2 lakh crore factoring in discoms outstanding dues till June this year. Some states had urged the central government to hike this liquidity package by factoring in outstanding dues of April and May as well.

"As against Rs 90,000 crore of liquidity infusion package announced by the government, Rs 70,590 crore worth of loans have been sanctioned and Rs 24,742 crore has already been disbursed/released till September 16, 2020," said Power Minister R K Singh in a written reply in the Rajya Sabha.

The government is infusing liquidity in the power sector through Power Finance Corporation (PFC) and REC Ltd to enable the sector to maintain power supplies as cash flows had plummeted during lockdown imposed to contain the spread of COVID-19.

Under this intervention, the REC and PFC are extending special long term transition loans of up to 10 years to discoms for liquidating their outstanding dues of Central Public Sector Undertaking (CPSU) Generation (Genco) & Transmission Companies (Transcos), Independent Power Producers (IPPs) and Renewable Energy (RE) generators.

In separate reply to the House, the minister stated that power demand would increase from 1,399.91 billion units (BU) in 2019-20 to 2,047.43 BU in 2026-27.

He also told the House that the peak power demand would increase to 298.77GW in 2026-27 from 200.69GW in 2019-20.