Private sector thermal power plants are in for better times with a likely ₹ 40,000-crore liquidity boost coming in from government initiatives along with Coal India decision to offer longer term credit to them, says a report.
While the government has decided to liquidate the overdue receivables from state discoms under a rescue package, national miner Coal India has decided to allow private thermal power plants to get coal on 90-180 days credit.
The government support is by way of a ₹ 1.2-lakh-crore loan scheme to enable discoms to pay outstanding dues to gencos. The scheme requires the first tranche, accounting for half the package, to be disbursed immediately and the balance upon discoms committing to operational improvements.
Delayed payments by state discoms and the weakening cash flows due to the lockdowns have the overdues to private gencos to the tune of ₹ 59,000 crore as of October. The overall overdues run up to Rs 90,000 crore as of March 2020. This includes overdue to Central, state and private capacities and also across coal, gas, hydro and renewables.
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