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<ul><li><keyword id="1402930" type="General" weightage="50" keywordseo="state-discom" source="Orion">State discom</keyword> legacy dues to <keyword id="3278843" type="General" weightage="80" keywordseo="gencos" source="Orion">gencos</keyword> have more than halved from ₹1.38 lakh crore last June last year to ₹61,000 crore as of 24 July 2023.</li><li>This was due to the introduction of a late payment scheme which penalizes discoms for delaying payments.</li><li><keyword id="14181100" type="General" weightage="50" keywordseo="green-energy-open-access-rules" source="Orion">Green Energy Open Access Rules</keyword> also reduced the minimum offtake threshold for consumers.</li><li>Commercial &amp; industrial consumers can also demand green power from state discoms voluntarily. </li></ul>India’s green power generators have been gaining from increased payment discipline amongst state distribution companies or discoms after the government introduced late payment surcharge scheme (LPS) last year. That’s good news for renewable power generators like Greenko, ReNew, <keyword id="45417" type="General" weightage="50" keywordseo="adani-power" source="Orion">Adani Power</keyword> and more who will now be assured of faster payments. The scheme has made good progress with payment discipline amongst state distribution companies as state discom legacy dues to gencos have more than halved from ₹1.38 lakh crore in June last year to ₹61,000 crore as of 24 July 2023, says a report by CreditSights. Also, Power Finance Corporation (PFC) and <keyword id="64468" type="General" weightage="50" keywordseo="rural-electrification-corporation" source="Orion">Rural Electrification Corporation</keyword> (REC) have been funding various state governments to help clear these dues. In the last one year, both these public sector companies (PSUs) have given multibagger returns to their investors — at 162% and 154% respectively. Most power generators with a renewable energy portfolio have also been gaining ground. What’s the scheme? As per the scheme, state discoms who delay their payments beyond the default trigger date, will lose short-term power access. Apart from that, progressively these restrictions would increase each month for medium and long-term power access as well for each month of non-payment. The scheme is a game changer for the renewable power generators who are stuck with large capex costs along with delayed payments. “It (the scheme) reduced the counterparty credit risks posed by the state discoms. Not only would the state discoms have to clear their sizable backlog of owed dues to the gencos, they would also be more disincentivized to delay payments to the gencos given the punitive penalties,” said the CreditSights report. Gencos who are able to receive timely payments can improve their account receivables, working capital positions and cash flows. “Investor sentiment in the sector has also improved materially post the LPS scheme, based on our discussions with market participants,” CreditSights observed. More green consumers In the Union Budget 21-22, eligible Indian states were granted additional borrowing limits of 0.25% - 0.5% of annual Gross State Domestic Product (GSDP). This was applicable over a four-year period from FY22-FY25. Some of these benefits have flowed to the state discoms. Till date, ₹66,400 crore of additional borrowing permissions have been granted to the states — for financial support to the state discoms, the report said. The government also came up with Green Energy Open Access Rules in June last year, which helped improve offtake of renewable power. It reduced the renewable energy minimum offtake threshold of consumers from 1 MW to 100 kW. It also allows commercial &amp; industrial consumers to demand green power on a voluntary basis from state discoms. It also provided clarity on final tariffs charged to consumers of renewable energy, bringing in more transparency into the system. These new rules will drive better transparency, access and stronger demand for renewable energy across the smaller C&amp;I customers, CreditSights opines. The Indian government has set an ambitious target to convert 40% of total installed power capacity green by 2030. That means India would have to add 250 GW of renewable energy capacity between 2023-2027 – and it has been working actively to clear bottlenecks along the way, most of which is ensuring these green power producers are paid on time.

Indian green power generators are gaining from more takers & timely payments

New Delhi, Dec 3 () Union Power Minister R K Singh on Tuesday said in the Rajya Sabha that state government departments owe about Rs 41,700 crore to power distribution companies and asked states to ensure payments are made on time.
 The minister also informed that aggregate technical and commercial (AT&amp;C) losses have come down to about 18 per cent from 22 per cent.
 "As a result of UDAY, some improvement has happened. The losses in AT&amp;C have come down from 22 per cent to about 18 per cent. So there has been some progress, though the progress could have been better," Singh said.
 The minister said the Centre would work together with states to bring down losses of power discoms, which are with state governments.
 He said most of the discoms are filing revision in tariff on time to take care of inflation and risng input cost.
 "Barring one or two discoms, most of them have filed on time. Although in many cases, revision has not taken place," he said.
 The minister attributed the losses in discoms to theft, inefficiencies in billing and collection by distribution companies, and government departments not paying their dues on time.
 "Total dues against government departments of states is Rs 41,700 crore and loss (of discoms) in 2018-19 is Rs 27,000 crore. I have written to states, they must make sure that the government departments pay on time," Singh said.
 He said the government announces subsidy for various categories of people and this subsidy should be paid upfront to distribution companies.
 However, he said, the states do not follow this rule and pay partial subsidy amount.
 To reduce losses of discoms, the minister said states have been asked to adopt smart pre-paid metres in the next three years, and informed that 7.5 lakh such metres have been installed in Uttar Pradesh.
 State government departments should also install smart pre-paid metres, he said. MJH RVK

State govt departments owe Rs 41,700 cr to discoms: Power Minister

New Delhi, The Government has proposed to free both <keyword id="913456" type="COMPANY" weightage="20" keywordseo="power-producers">power producers</keyword> and consumers from continuing with contracted obligation once the tenure of a power purchase agreement expires. The move is expected to provide flexibility to both procurers (mainly <keyword id="53091" type="COMPANY" weightage="20" keywordseo="discoms">Discoms</keyword>) and generators (<keyword id="98684" type="PERSON" weightage="20" keywordseo="power-projects">power projects</keyword>) to look for <keyword id="10462072" type="UNKNOWN" weightage="20" keywordseo="meaning-contracts-post-expiry">meaning contracts post expiry</keyword> of a PPA, one where discoms can get the option to buy cheaper power available in the market while generators could look at new consumers either under <keyword id="10462074" type="UNKNOWN" weightage="20" keywordseo="long-term-contract">long term contract</keyword> or through price discovery on exchanges. The changes have been brought out by <keyword id="10462076" type="COMPANY" weightage="20" keywordseo="the-power-ministry-through-draft-proposals">the power ministry through draft proposals</keyword> on which is it seeking <keyword id="10462075" type="UNKNOWN" weightage="20" keywordseo="stakeholders-comments">stakeholders comments</keyword> before regulations could be finalised. The stakeholders have been asked to submit their comments suggestions by December 24, 2020. In its proposal, the ministry has said that states with long-term PPAs with the interstate central generating stations, whose tariff is determined by the Commission, and which are due to expire in the future, can choose to give up the contracted power after the completion of the PPA tenure of 25 years. Such a mechanism could be availed by the states procuring relatively costlier power from the central generating stations. Also, states looking to convert their long term PPA into shorter term agreements or look to buy power from exchanges to meet exigencies could also relinquish PPA after expiry of its tenure. <keyword id="6375040" type="UNKNOWN" weightage="20" keywordseo="power-ministry">Power ministry</keyword> officials said that the proposed guidelines would also help in making power generation more efficient as generators knowing that their contracts could be rescinded would strive to make their projects more competitive. Also, with PPAs being freed up, such surplus power would be available for deficit states at competitive price. Under the proposed regulations, the first right of refusal would test with discoms meaning contracted power will be freed only with the consent of discoms. Also, discoms looking to end PPAs would serve at least three month notice to generators to help them prepare for the situation. SEE ALSO: <a href="https://www.businessinsider.in/business/news/ikea-india-cfo-says-she-still-has-3500-crore-to-be-spent-in-india-the-pandemic-has-changed-targets-but-not-the-investment-plan/articleshow/79790938.cms">INTERVIEW: Ikea CFO says she still has ₹3,500 crore to be spent in India⁠— the pandemic has changed targets but not the investment plan</a> <a href="https://www.businessinsider.in/science/health/news/india-will-produce-300-million-doses-of-the-russian-sputnik-v-covid-19-vaccine-next-year/articleshow/79795341.cms">India will produce 300 million doses of the Russian Sputnik V COVID-19 vaccine next year</a> <a href="https://www.businessinsider.in/stock-market/news/how-to-check-mrs-bectors-food-specialities-ipo-allotment-status-online/articleshow/79808672.cms">Mrs Bectors Food Specialities IPO allotment: Here’s how to check share allotment status</a>

Government to offer flexibility to discoms to end long term power contracts

New Delhi, Apr 19 () The Union Cabinet is likely to approve next week a package for discoms reeling under revenue loss due to lower power demand amid the coronavirus lockdown, including setting up of an alternative investment fund to pay off their dues towards electricity generation companies, a source said. "The Cabinet in the coming week can approve a package for power distribution utilities (discoms) which are under stress due to lower demand and cash crunch," the source said. "The package may include creating an alternate investment fund to pay off dues on behalf of the discoms to gencos. The discoms may be charged nominal interest rate and administrative expenses on that," he added. The package may also include steps like directions to the state and central power regulators to reduce electricity traiff, the source sai. The payment of dues would help distribution companies (discoms) to increase their electricity load (supplies) and ensure 24X7 uninterrupted power supply. According to government data, discoms owe Rs 92,602 crore to power generation companies (gencos) as of February this year. A report by industry body CII had said discoms are likely to suffer a net revenue loss of around Rs 30,000 crore and liquidity crunch of about Rs 50,000 crore due to the coronavirus-induced nationwide lockdown. In its report released on Friday, CII had suggested host of measures like easy credit facility for discoms (from PFC and REC) to pay off its dues to gencos, lower tariff especially for industrial and commercial consumers and deferral of indirect taxes like electricity duty and coal cess. It said the power sector, one of the essential services under the lockdown till May 3, is battling the twin issues of demand and liquidity compression. Latest data from Power System Operation Corporation Ltd (POSOCO) indicated that total demand per week between March 23 and April 12 was 18 BU (billion units), compared to 23 BU during the week of March 9-15 (before 'Janata Curfew' and lockdown) -- a 25-28 per cent reduction in demand. Further extension of the lockdown could result in additional demand compression of 15 to 20 BU, implying a net revenue loss of Rs 25,000 to Rs 30,000 crore for the discoms, it had said. This will further increase the liquidity crunch to Rs 45,000 to 50,000 crore, in addition to the Rs 90,000 crore dues pending by the discoms to generating companies pre-lockdown. Earlier in the week, Renewable Energy Secretary Anand Kumar had said, "We are planning to create an alternative investment fund that will help to give load and financial support to discoms and clear the due to be paid to developers and generators. Our effort is to release maximum due payments from discoms to the power generators," "We want to make sure that our power supply and renewable power are protected and not compromised. We tried to clear all the financial dues of the generators and developers to enhance the capital available with them," Kumar had said during a webinar. KKS ABM

Cabinet likely to okay package for power discoms reeling under revenue loss in lockdown

The Center expects all states to affirm the Ujwal DISCOMs Assurance Yojana (UDAY) scheme by one month from now, paving the path for them to issue bonds by March 2017 to handle their mountings debts, Power Minister <keyword id="6355222" type="PERSON" weightage="20" keywordseo="Piyush-Goyal">Piyush Goyal</keyword> said on Saturday. 
 
" Goyal expressed positiveness that all states would come overboard by end of November, 2016 so that they can complete the formalities of signing the MoUs by December this year and complete the process of issuing bonds by March, 2017," Power Ministry said in a release. 
 
Under the UDAY so far 17 states/UTs signed the MoU with Maharashtra being the latest. 
 The consolidated <keyword id="3285669" type="UNKNOWN" weightage="20" keywordseo="discom-debt">discom debt</keyword>, including focal PSU duty that would be rebuilt in regard of these states is around Rs 2.57 lakh crore, which is around 68 for each penny of the aggregate remarkable discom debt as on September 30, 2015. 
 The Minister communicated that 100 per cent Rural Electrification, including villages in LWE (Left Wing Extremism) Districts and dense forests, would be accomplished by May 1, 2017, one year in front of timetable as set by Prime Minister <keyword id="6354477" type="PERSON" weightage="20" keywordseo="Narendra-Modi">Narendra Modi</keyword>. 
 
He informed that Rural Electrification Corporation is in the process of drawing up a scheme for extending long-term basis soft loans to states at a flat rate to electrify all households for both APL and BPL population. 
 
"A National Electricity Plan has been prepared to forecast the actual demand of electricity in real time and to attract new investments in the sector to promote new power generation capacity," Goyal said. 
 
Talking about a new initiative, he said that government would aid the setting up of small solar units by farmers, which would in turn power agricultural pump sets. 
 Informing about developments in the mining sector, Mines Secretary Balvinder Kumar said Ministry has asked <keyword id="37102" type="COMPANY" weightage="20" keywordseo="Andhra-Pradesh">Andhra Pradesh</keyword>, <keyword id="43945" type="COMPANY" weightage="20" keywordseo="Chhattisgarh">Chhattisgarh</keyword>, Haryana, Kerala and Goyal <keyword id="44522" type="CITY" weightage="20" keywordseo="Uttarakhand">Uttarakhand</keyword> to modify their rules to enable auctioning of minor mineral blocks.

Centre expects all states to fall under UDAY scheme in a month

New Delhi, Jan 5 () Power producers' total outstanding dues owed by distribution companies increased around 45 per cent to Rs 81,085 crore in November 2019 over the same month previous year, reflecting stress in the sector.
 Distribution companies (discoms) owed a total of Rs 54,834 crore to power generation companies in November 2018, according to portal PRAA (Payment Ratification And Analysis in Power procurement for bringing Transparency in Invoicing of generators).
 The portal was launched in May 2018 to bring in transparency in power purchase transactions between generators and discoms.
 In November 2019, the total overdue amount, which was not cleared even after 60 days of grace period offered by generators, stood at Rs 71,782 crore as against Rs 41,503 crore in the same month of the preceding year.
 Power producers give 60 days to discoms for paying bills for the supply of electricity. After that, outstanding dues become overdue and generators charge penal interest on that in most cases.
 In order to give relief to power generation companies (gencos), the Centre enforced a payment security mechanism from August 1. Under this mechanism, discoms are required to open letters of credit for getting power supply.
 According to the latest data on the portal, outstanding dues in November has increased over the preceding month. In October 2019, total outstanding dues on discoms stood at Rs 80,635 crore.
 The overdue amount in November has also increased over the preceding month. The total overdue amount was Rs 70,477 crore in October 2019.
Discoms in Rajasthan, Jammu &amp; Kashmir, Telangana, Andhra Pradesh, Karnataka and Tamil Nadu account for the major portion of dues to power gencos, taking a longer duration of up to 943 days to make payments, the data showed.
 Among major states, Andhra Pradesh tops the list with 943 days to make payments, followed by Rajasthan (942 days), Bihar (942 days), Haryana (940 days), Tamil Nadu (938 days), Madhya Pradesh (927 days) and Telangana (920 days).
 Delhi takes 969 days to make payments to power gencos.
 Overdues of independent power producers amount to over 26 per cent of the total overdue of Rs 71,782 crore on discoms in November 2019.
 Among the central public sector power generators, NTPC alone has an overdue amount of Rs 12,483.16 crore on discoms, followed by NLC India at Rs 4,380.22 crore, NHPC at Rs 3,165.11 crore, THDC India at Rs 2,078.30 crore and Damodar Valley Corporation at Rs 936.59 crore.
 Among private generators, discoms owe the highest overdue of Rs 3,201.68 crore to Adani Power, followed by Bajaj Group-owned Lalitpur Power Generation Company Ltd at Rs 2,212.66 crore and GMR at Rs 1,930.16 crore. KKS ABM

Discoms' outstanding dues to power gencos rise 45 pc to Rs 81,085 cr in Nov

New Delhi, Dec 15 () Power producers' total outstanding dues owed by distribution companies rose around 48 per cent to Rs 81,010 crore in October 2019 over the same month last year, reflecting stress in the sector.
 Distribution companies (discoms) owed a total of Rs 54,654 crore to power generation companies in October 2018, according to portal PRAA (Payment Ratification And Analysis in Power procurement for bringing Transparency in Invoicing of generators).
 The portal was launched in May 2018 to bring in transparency in power purchase transactions between generators and discoms.
 In October this year, the total overdue amount, which was not cleared even after 60 days of grace period offered by generators, stood at Rs 67,143 crore as against Rs 39,338 crore in the same month last year.
 Power producers give 60 days to discoms for paying bills for the supply of electricity. After that, outstanding dues become overdue and generators charge penal interest on that in most cases.
 In order to give relief to power generation companies (gencos), the Centre enforced a payment security mechanism from August 1. Under this mechanism, discoms are required to open letters of credit for getting power supply.
 According to the latest data on the portal, outstanding dues in October has decreased over the preceding month. In September 2019, total outstanding dues on discoms stood at Rs 82,548 crore.
 However, the overdue amount in October has increased over preceding month of September. The total overdue amount was Rs 65,155 crore in September.
 The September 2019 figures of dues and overdues have been revised upwards from Rs 69,558 crore and Rs 52,408 crore provisional numbers released last month on the portal.
 Discoms in Rajasthan, Jammu &amp; Kashmir, Telangana, Andhra Pradesh, Karnataka and Tamil Nadu account for the major portion of dues to power gencos, taking a longer duration of up to 913 days to make payments, the data showed.
 Among major states, Andhra Pradesh tops the list with 913 days to make payments, followed by Rajasthan (912 days), Bihar (912 days), Haryana (910 days), Tamil Nadu (908 days), Madhya Pradesh (897 days) and Telangana (890 days) in that order.
 Delhi, a smaller state, takes 939 days to make payments to power gencos.
 Overdues of independent power producers amount to over 22.46 per cent of the total overdue of Rs 67,143 crore on discoms.
 Among the central public sector power generators, NTPC alone has an overdue amount of Rs 12,271.75 crore on discoms, followed by NLC India at Rs 4,413.94 crore, NHPC at Rs 3,178.42 crore, THDC India at Rs 1,883.54 crore and Damodar Valley Corporation at Rs 870.92 crore.
 Among private generators, discoms owe the highest overdue of Rs 3,201.68 crore to Adani Power, followed by Bajaj Group-owned Lalitpur Power Generation Company Ltd at Rs 2,212.66 crore and GMR at Rs 1,930.16 crore. KKS HRS

Discoms' outstanding dues to power gencos rise 48 pc to Rs 81,010 crore in October

<ul><li>The <keyword id="44011" type="CITY" weightage="20" keywordseo="power">power</keyword> sector roughly constitutes 20% of all the bad loans on the balance sheets of Indian banks. </li><li>While the resolution of stressed power assets is an urgent priority, the government is also preparing <keyword id="6447217" type="UNKNOWN" weightage="20" keywordseo="reforms">reforms</keyword> to ensure the long-term viability of the sector. </li><li>These include the implementation of a <keyword id="6357205" type="UNKNOWN" weightage="20" keywordseo="direct-benefit-transfer">direct benefit transfer</keyword> scheme for consumer subsidies and the separation of production and distribution operations of power companies. </li></ul>Much has been made of the growing pile of non-performing assets emanating from India’s power sector. A number of power companies such as Jindal India Thermal Power and Lanco Anpara are expected to be referred to insolvency courts following the expiry of a deadline for the resolution of ₹1.7 trillion worth of bad loans from the sector. This is roughly 20% of all the bad loans on the balance sheets of India’s banks. Recognising the problems that are unique to the power sector - like a liquidity crunch and a dearth of power-purchase agreements - and the need to ensure these coal-fuelled projects don’t undergo liquidation, the Indian government is planning to establish <a href="https://www.livemint.com/Industry/H2ttLugifLjwv91QYdnPFM/REC-to-seek-central-banks-nod-for-Pariwartan-ARC.html">an asset reconstruction company</a> (ARC) to resolve stressed power assets. Under its Pariwartan scheme, the state-owned Rural Electrification Corp will set up the ARC to clean up the sector in anticipation of a future revival in demand. Bigger reforms in the works However, the power sector’s problems go well beyond bad loans. While the resolution of bad loans is an urgent priority, the Indian government is also planning to implement a series of reforms to ensure the long-term viability of the sector and its participants. A number of amendments to the Electricity Act of 2003 are in the works. First, the government is looking to establish a direct benefit transfer (DBT) scheme for the targeted distribution of subsidies. The reason power producers and distribution companies are racking up so much debt is because state governments aren’t being able to allocate subsidies to consumers efficiently. A DBT will see the subsidy amount deposited in the bank account of a consumer. Second, the government is also looking to mandate the separation of production and supply operations of power companies, which means that power producers will not supply the electricity they generate. This reduces the complexity of operations and also gives consumers greater choice. Third, it also plans to exempt <keyword id="34553" type="ORGANIZATION" weightage="20" keywordseo="renewable-energy">renewable energy</keyword> producers from licensing requirements in order to encourage thermal power generators to diversify their operations. Finally, payments security protocols are being devised for agreements between producers and distributors to prevent non-payment of dues. The reforms will be a much-needed step. In order to prevent any future pile-up in bad loans, the government needs to improve the supporting <keyword id="17408" type="DOMAIN" weightage="20" keywordseo="infrastructure">infrastructure</keyword> and legislation for the power sector so that projects are capable of generating revenue.

Indian government is planning a package of reforms for the power sector

Residents of Delhi, Himachal Pradesh, Jammu &amp; Kashmir, Rajasthan, Uttar Pradesh and Jharkhand have to be prepared for <a href="http://www.businessinsider.in/searchresult.cms?query=power+cuts">power outages</a> as state-run generators have asked <a href="http://www.businessinsider.in/searchresult.cms?query=discoms">discoms</a> to clear the dues at the earliest. 
 The state run power generators are threatening to cut off supplies unless <keyword id="53091" type="UNKNOWN" weightage="20" keywordseo="discoms">discoms</keyword> pay up Rs 20,000-crore outstanding bills. Around 80% of the dues are owed by these northern and eastern states and likely to face maximum number of <keyword id="6361137" type="UNKNOWN" weightage="20" keywordseo="power-cuts">power cuts</keyword>. 
 
The <a href="http://www.businessinsider.in/Companies-Can-Supply-Power-24X7-Without-Increasing-Tariff-Piyush-Goyal/articleshow/37242272.cms">electricity demand</a> has increased due to deficient and sweltering heat in most parts of the country so much so that farmers’ <keyword id="6368114" type="UNKNOWN" weightage="20" keywordseo="power-demand">power demand</keyword> touched 1.5 lakh mega watt last week. 
 
Although farmers get power either free or heavily subsidised rates, but payments to the power generators becomes uncertain because the utilities apparently do not have the money to pay this bill. 
 
In Delhi, reportedly, <a href="http://www.businessinsider.in/searchresult.cms?query=BSES+Rajdhani+Power+">BSES Rajdhani Power</a> and BSES Yamuna Power have outstanding dues of about Rs 1,600 crore. 
 
They owe money to central power generators such as National Hydro Power Corporation, Satluj Jal Vidyut Nigam, Tehri Hydro Development Corporation, Nuclear Power Corporation of India and Power Grid Corporation of India. 
 
Dues of power distributors in Jammu &amp;Kashmir are over Rs 2,700 crore while Rajasthan-based utilities owe about Rs 1,000 crore to generators. 
 
Among the power generators, Damodar Valley Corporation has the biggest outstanding dues of Rs 8,769 crore and Jharkhand is the biggest defaulter. 
 
(Image: Thinkstock)

Brace up for power outages Delhi, Rajasthan and UP. State-run generators seeking their pound of flesh!

New Delhi, Apr 17 () Industry body CII on Friday said discoms are likely to suffer a net revenue loss of around Rs 30,000 crore and liquidity crunch of about Rs 50,000 crore due to the coronavirus-induced nationwide lockdown. According to government data, the discoms owe Rs 92,602 crore to Gencos as of February, 2020. In its report released on Friday, the CII has suggested host of measures like easy credit facility for discoms (from PFC and REC) to pay off its dues to Gencos, lower tariff especially for industrial and commercial consumers and deferral of indirect taxes like electricity duty, coal cess etc. According to the report, power sector, one of the essential services under the lockdown till May 3, is battling the twin issues of demand and liquidity compression. Latest data from Power System Operation Corporation Limited (POSOCO) indicates that total demand per week between March 23 and April 12 was 18 BU (billion units), compared to 23 BU during the week of March 9-15 (before Janata Curfew and lockdown), 25-28 per cent reduction in demand. The further extension of the lockdown could result in additional demand compression of 15 to 20 BU, implying a net revenue loss of Rs 25,000 to Rs 30,000 crores for the discoms, it said This will further increase the liquidity crunch to Rs 45,000 to 50,000 crores, in addition to the Rs 90,000 crore dues pending by the discoms to generating companies' pre-lockdown, it said. "Recent experience suggests that a financial restructuring package without insistence on structural reforms leads to temporary alleviation of the problem in the sector followed by eventual recurrence of the core problems of liquidity. We therefore propose that the post COVID-era is the right time to undertake an ambitious overhaul of the sector...", said Chandrajit Banerjee, Director General, CII in the report. The report highlighted that the thermal generators could face additional Rs 20,000 crore to 25,000 crore cash crunch. Renewable energy generators have been bearing the brunt of power curtailments, overdue payments by state discoms of Rs 10,000 crores and policy uncertainty, it said. Further, 20 to 25 per cent of debt of renewable energy projects comes from overseas lenders, to whom the 3-month moratorium by RBI will not apply, it pointed out. Transmission companies are facing delays in on-going projects as lockdown has affected the movement of manpower and supply resulting in delays and the manufacturing sector employing 20 lakh people across over 4000 SMEs could be at stake, it said. In such a scenario, it becomes increasingly important to inject liquidity in the sector to ensure continuous supply, power generation viability and robust industrial recovery post lockdown, it suggested. CII's white paper 'Sustaining India's Power and Renewable Energy Sector analyses impact of COVID-19 on the sector with the demand reduction coupled with delays in collections. Shot term measures include ensuring short-term liquidity management like creation of special line of credit through PFC/REC to discoms. Secondly, the government can allow deferral of payments of indirect taxes and for mitigating impact of delays in on-going renewable projects it suggested an increase in tariff. Under medium-term reforms measures, it suggested to develop a roadmap to implement cost-reflective tariffs and rationalized tariff structure with lower commercial and industrial tariffs. The central government could invest directly through a central holding company. It also asked to develop a central government-led funding scheme for accelerating the rollout of smart metering (investment of Rs 1.5 lakh crores over 4 to 5 years) and adoption of digital solutions for improving operational decision-making among discoms. It said that the liquidity crunch of discoms is likely to worsen during and post the lockdown, and the gap may grow by 20–25 percent. The sector is likely to require significant transition financing to mitigate the impact. The central power finance institutions (PFC, REC, and IREDA) should consider lending directly to discoms or to discount the discoms' outstanding dues using funds borrowed from banks or from their regular sources, it suggested. KKS DRRDRR

Discoms to suffer Rs 30K cr revenue loss, face Rs 50K cr liquidity crunch due to lockdown: CII

In the backdrop of mounting <keyword id="142154" type="UNKNOWN" weightage="20" keywordseo="bad-loans">bad loans</keyword>, the <a href="http://www.businessinsider.in/searchresult.cms?query=RBI&amp;sortorder=effectivedate">Reserve Bank of India</a> (RBI) does not want banks to take any chances and has asked them to exercise while giving <a href="http://www.businessinsider.in/searchresult.cms?query=loans&amp;sortorder=effectivedate">loans</a> to <a href="http://www.businessinsider.in/searchresult.cms?query=power+distribution&amp;sortorder=effectivedate">power distribution companies</a>. 
 
The RBI, in a communiqué, told state-owned banks that any additional exposure to discoms would result in ever-greening and invite supervisory measure. 
 
Meanwhile, the central bank has also asked the <a href="http://www.businessinsider.in/searchresult.cms?query=state+banks&amp;sortorder=effectivedate">banks</a> to put existing loans on discoms under <a href="http://www.businessinsider.in/searchresult.cms?query=npas&amp;sortorder=effectivedate">Non-Performing Assets</a> (NPAs). 
 
This will add Rs 1.09 lakh crore to the existing corpus of bad loans, which had crossed Rs 4 lakh crore in December 2015. 
 
Banks' total credit outstanding to discoms stands at Rs 4.37 lakh crore exposure. 
 As per the <keyword id="6602196" type="UNKNOWN" weightage="20" keywordseo="Uday-scheme">UDAY scheme</keyword>, 75% of the loan would be converted into bonds by end of March 2017, while the balance Rs 1.09 crore would be treated as loans. 
 
According to the RBI rules, the interest return on the bonds and loans would be lowered to 0.1percentage point mark over base rates of respective banks, from 14-15%. 
 For <keyword id="141811" type="UNKNOWN" weightage="20" keywordseo="power-distribution-companies">power distribution companies</keyword>, banks will have to do an accounting treatment as a part of bonds would be classified as 'standard', or well-behaved assets, while the balance loans would be booked as NPAs.

RBI is asking banks to tread with caution while giving loans to discoms

<keyword id="6358777" type="COMPANY" weightage="80" keywordseo="New-Delhi">NEW DELHI</keyword>: The Delhi government told the Supreme Court that BSES companies of <keyword id="10926" type="CITY" weightage="60" keywordseo="Reliance">Reliance</keyword> Infrastructure were “inefficient” as they had defaulted on their dues to NTPC and other <keyword id="44578" type="UNKNOWN" weightage="80" keywordseo="electricity">electricity</keyword> suppliers, unlike the Tata group’s distribution arm that had promptly paid. 
 
“These two companies owe Rs 4,500 crore. My concern is outages. You cannot take electricity and not pay for it. At the end of the day the Tatas are paying, why can’t (BSES) Rajdhani? Both are working in the same regulatory regime,” Additional Solicitor General Siddharth Luthra told a two-judge bench hearing the case. The two Reliance companies have been locked in a bitter stand-off with the generating companies over arrears. They claim that the Delhi Electricity Regulatory Commission (DERC) has failed to provide adequate tariffs that can cover costs and give reasonable returns. 
 
BSES lawyer Mukul Rohatgi claimed on Wednesday that the dues outstanding to the two companies are around .`15,000 cr. The company has cited this outstanding amount as the reason why it could not pay generating companies any more money till it recovered some part of the dues. Power major NTPC has earlier threatened to cut off powers to BSES if the stalemate continued. 
 
At the last hearing, the bench asked NTPC to desist from doing any such thing in “consumer” interest and asked BSES to pay a sum of.`700 crore due from the beginning of the 2014. 
 
On Wednesday, when the bench reconvened, BSES and the power generating companies again traded charges over non-payment of dues. While NTPC insisted that no dues have been paid since the last court hearing and suggested “power regulation” to deal with the problem, a euphemism for power cuts, BSES claimed it had paid.`601 crore so far. Senior advocate KK Venugopal claimed that NTPC had in turn to pay Coal India and non-payment by BSES was having a “cascading effect” all around. 
 
“He is the biggest industrialist in the country,” Venugopal stated. Rohatgi countered this. “I am owed Rs15,000 crore, and I am termed inefficient!” The bench then adjourned the case till Tue dayto allow both sides to sort out the issue of payment of current dues, but not before the DERC, through senior advocate Meet Malhotra, had similarly accused BSES of being “inefficient” and “financially indisciplined”. 
 
Malhotra claimed that there were major variations in figures in audited statements made earlier and now, adding a CAG audit would help uncover the facts. The previous arrears may accordingly have to be downgraded, he said. 
 
The DERC has in a roadmap for recovery of dues suggested an 8per cent surcharge to recover these over a period. Any adjustments will bring down the recovery period. He also accused BSES of not infusing enough equity to instill enough confidence in banks to loan them amounts necessary to pay back power generating companies. 
 
“It is evident that the current financial position could have been avoided by infusion of requisite equity from time to time by BYPL,” he told Justices SS Nijjar and AK Sikri who are hearing the case. The discoms accuse the state and the central governments of failing to bail them out by subsidising their costs as done in other states.

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