Stop granting loans to DISCOMs: Power minister to REC, PFC -Governance Now

Stop granting loans to DISCOMs: Power minister to REC, PFC

Many power distribution companies incurring heavy transmission and distribution losses

GN Bureau | March 9, 2018

#Rural Electrification Corporation #REC #PSU

Minister of power and new & renewable energy R K Singh has asked Rural Electrification Corporation (REC) and Power Finance Corporation (PFC) to strictly comply with the norms before allocating loans to DISCOMs either for capex or for non-capex.

Singh took a review meeting of the two financing arms of the power ministry.

He noted that many power distribution companies are incurring heavy transmission and distribution (T&D) losses and it may be difficult for them to repay the loans.

Singh directed that DISCOMs which are making heavy losses (above 15 per cent) will not be granted any loans for capital expenditure or non-capital expenditure until they come up with a road map of reducing the losses within stipulated time frame of not more than 2 years.

This will be vetted by the ministry and only then will the grant of loan be considered for such DISCOMs.

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