A report by CRISIL stated that the new payment security mechanism will benefit power-generation companies (gencos). It said that these companies are expected to get payments within the expiry of the official credit period in the region of 45-60 days.
“The implementation of the order is set to benefit generators, as the power supplied to discoms is conditional upon the opening of an LC (Letters of Credit). This is for an amount adequate to cover the entire quantum of power to be supplied. Once an LC is opened, it will be communicated to the National Load Despatch Centre (NLDC) or Regional Load Despatch Centres (RLDC), enabling gencos to recover any overdue amount by invoking the LC when a discom (electricity distribution company) doesn’t pay on time,” CRISIL noted.
