NEW DELHI: The Delhi government appears to be in no mood to grant the BSES discoms a comfort letter that would enable them to get an Rs 11,000 crore loan from Power Finance Corporation (PFC). Power minister Satyendar Jain said, they were “not comfortable” with the BSES companies when questioned on the government extending cooperation to BSES to secure the loan. The two discoms, who supply power to about 70% of the Delhi’s population, meanwhile said unless they get the loan, they would not be able to pay generators, and any payment failure could lead to outages in Delhi.
The discoms said they had been pursuing the issue of a comfort letter since early January. The companies also said that there was no legal binding on the government for providing the letter, in the event that the BSES discoms defaulted on loan repayment. “The PFC loan was sanctioned in December last year, but the bottom line is that if we don’t get the comfort letter, then we don’t get the loan,” said discom sources. The discoms claimed that the only response they got from the government in a series of meetings over the issue was that the government was looking into it. While Jain has not yet denied issuing a comfort letter, discoms said the longer it taker to get the comfort letter, the dicier would be their loan.
The two discoms, BSES Rajdhani and BSES Yamuna, have sought a loan of Rs 11,006 crore from PFC to pay their dues and stabilize their financial situation. However, the loan is subject to getting a “comfort letter” from Delhi government so as to signify that BSES was a Joint Venture of the government performing public utility service. Reliance Infra, which owns the two BSES discoms, has committed to pledge its entire 51% of shareholding in the two companies to PFC for availing the loan.
“It is essential that for maintaining uninterrupted supply of power in Delhi, particularly with summers approaching fast, PFC loan covenant is satisfied at the earliest and the Delhi government should issue a letter of comfort to PFC for facilitating the drawdown of sanctioned loan. With the very huge revenue gap that have been built up as acknowledged by DERC in its tariff order, overdues of BSES discoms to generators/transmission companies have been going up consistently. Some interim arrangement has been made to pay partial dues of the generators but in the wake of rising dues, generators are threatening regulation of power to BSES,” claimed the two discoms.
The discoms claimed that the loan would help BSES in meeting its payment obligations as well as realign its liability portfolio. “The tenure of loan will be for a period of seven to eight years and the scheme will also help BSES save interest of around 1.5% to 2% from current levels,” said the companies.
