Delhi backs discoms’ demand for loans

NEWDELHI: The Delhi government has written to the Union ministry of home affairs to grant loans worth₹6,350 crore to the three private distribution companies under the Centre’s special loan scheme for discoms

While the demand to get a share from the Centre’s ₹90,000 crore package as loans was raised by the discoms, the Delhi government backed their request, stating that the liquidation money would help the government recover outstanding dues of Rs 15,595.27 crores - which the power distribution companies owe to the Delhi government’s generation firms.

But to avail the Centre scheme, a state guarantee is required for the loan to be granted, which is not possible in Delhi’s case because it is a Union Territory. As per government documents, discom BSES Rajdhani Power Ltd (BRPL) has sought a loan of ₹3,050 crore, BSES Yamuna Power Ltd (BYPL) of ₹2,300 crore and Tata Power Delhi Distribution Ltd of ₹1,000 crore.

“Since Delhi can’t be a guarantor, we have requested the Centre to give the state guarantee on behalf of the Delhi government. The loan is strictly to pay off the dues of power generating and transmission companies. So, it will help clear the dues which discoms owe to the two power generating units IPGCL and PPCL, and the Delhi Transmission Limited, the transmission company - all owned by the Delhi government,” said a senior government official.

In her letter to the MHA, Delhi’s power secretary Padmini Singhla wrote: “Due to power purchase costs and a significant drop in collection efficiencies from consumers following the Covid-19 outbreak, the sector will require liquidity infusion for sustenance.

Delhi discoms have requested a loan from PFC under the proposed liquidity injection package of ₹ 90,000 crores for meeting the liquidity crunch due to the impact of Covid-19.”

Singhla’s letter also stated that the power distribution companies of Delhi “are one of the best performing companies” in the power sector with their aggregate technical and commercial (AT&C) losses below 12%. Delhi had successfully met an all time peak demand of 7409 MW in July, 2019, it stated.

Till lockdown 3.0 that lasted for two months, industries, shops and other commercial activities were shut, which meant low electricity consumption and lower revenue for the power discoms.

These activities were allowed to open only in the fourth phase of the lockdown which started from May 18.

On April 26, HT had reported that the first month of the lockdown had not only decreased Delhi’s daily average power demand by 35% over the previous year, but it also turned out to be a period with the lowest average electricity consumption in the Capital over the last 11 years at least.

Delhi was among the first cities to impose a lockdown which came into effect from March 23.