The Centre is considering offering state governments concessional loans from public sector lenders Power Finance Corp. (PFC), Rural Electrification Corp. Ltd (REC) and Indian Renewable Energy Development Agency (IREDA) to help power distribution companies clear green energy dues.
These three companies are the largest lenders to the power sector, and the move is expected to resolve a growing crisis in the clean energy sector even as India chases ambitious targets in renewable energy.
With record low solar and wind power tariffs, banks are wary of lending to renewable energy developers as they suspect the viability of such projects. The loans are expected to be made available at cost plus nominal fee to help clear the backlog that has resulted in electricity distribution companies (discoms) owing ₹67,237 crore at the end of October for power bought from generation companies (gencos).
