The government’s ₹90,000 crore liquidity boosting plan for cash-starved electricity utilities has stalled as state governments hesitate to give guarantees.
Power Finance Corporation and its subsidiary REC Ltd, which are supposed to disburse the relief package to state-owned electricity distribution companies (discoms), have found that that state governments are reluctant to sign the dotted line on standing guaranteeing to loans and implementing the mandatory reforms.
“The (power) ministry has been clear that we must lend only if the state guarantees the loan,” a senior executive at Power Finance Corporation (PFC) told Mint on condition of anonymity.
“We’re getting requests from several state-owned discoms on availing these loans. Uttar Pradesh’s discoms have asked for ₹21,000 crore in borrowings.