Monthly instalment scheme can help discoms save one-fourth of additional payout to gencos: Crisil

New equated monthly instalment scheme introduced by power ministry can help electricity distribution companies (discoms) save a quarter of their additional payouts and clear around Rs 20,000 crore payments to generation firms (gencos) this fiscal, according to Crisil Ratings.

“Electricity distribution companies (discoms) could potentially save a quarter of their additional payouts, and effectively pay Rs 20,000 crore to generation companies (gencos) this fiscal — in addition to their annual cost of power purchase — if they subscribe to the ministry of power’s new scheme,” Crisil said in a statement.

Under this scheme, overdues, including past Late Payment Surcharge (LPS) as on the cut-off date of June 3, 2022, will be converted into Equated Monthly Instalments (EMIs) that discoms have to pay over 12 to 48 months, based on different slabs.