Power package: Rs 90,000-crore credit line to fund discoms afresh, but with strict riders

A fresh loan of Rs 90,000 crore is being extended by sector-specific lenders PFC-REC to the state-run power distribution companies, but with definite riders meant to ensure that the facility indeed comes to the aid of these tottering entities. According to sources, the fresh funding would be done in two tranches of Rs 45,000 crore each, both special long-term institution loans of tenures up to 10 years.

The release of the first component of the loan to each state discom will be contingent on the respective state government undertaking to clear the departmental dues to its discom in three years, and putting in place a credible mechanism to release the subsidies – meant for the consumers but routed through the discoms – in advance.