CCEA approves discom loans above their borrowing limit
New Delhi: The Cabinet Committee on Economic Affairs (CCEA) on Wednesday approved a one-time relaxation to Power Finance Corporation (PFC) and Rural Electrification Corporation (REC) for extending loans to state-run electricity distribution companies (discoms), above their working capital limits placed under the Ujwal DISCOM Assurance Yojana (UDAY).
The decision comes in the backdrop of some discoms being unable to avail India’s ₹1.25 trillion reform-linked loan package for clearing outstanding dues. With some fund-starved discoms neither having the headroom for borrowing more working capital, nor the requisite state receivables to clear their dues, the power ministry had circulated a Cabinet note seeking a one-time exemption on working capital limits placed under UDAY, Mint reported on 28 July.
“CCEA approves one-time relaxation to Power Finance Corporation and Rural Electrification Corporation for extending loans to DISCOMs above limits of working capital cap of 25% of last year’s revenues under Ujwal DISCOM Assurance Yojana,” the government’ principal spokesperson said in a tweet.
