REC, PFC all set to disburse loans; CPSEs RoE to help them absorb Rs 3,000 crore hit, says RK Singh
The Rs 90,000 crore liquidity booster announced on Wednesday came at just the right time to kick-start the chain of payments for the cash-strapped power sectors, power and renewable energy minister R K Singh told ET in an exclusive interview on Wednesday. Power Finance Corp (PFCNSE -2.18 %) and RECNSE -1.29 % Ltd are all set to kick-start the scheme from Thursday offering loans at rates about 1.5 per cent less than their usual offerings. He said the fixed returns of CPSUs will help them absorb the impact of Rs 3,000 crore revenue hit due to fixed charges waiver. Edited interview excerpts:-
On the liquidity booster scheme
“The package was absolutely necessary and a great boost for the sector as all outstanding dues of the generation companies have been taken care of. Viability of distribution companies will go up too because the dues attracted delayed payment surcharge ranging from 12 per cent-18 per cent which will be replaced by loans of lower rates say 8.5 per cent- 9 per cent with 10-year repayment. When the coal companies get paid, the railway freight gets paid, the whole sector becomes viable,” he said.
