Special long term transition loan approved for MePDCL to clear outstanding liabilities

Shillong Aug 14: The Meghalaya Power Distribution Corporation Limited (MePDCL) will avail assistance under the Aatma Nirbhar Bharat Abhiyaan (ANBA) scheme of the Central government with the State Cabinet approving a special long term transition loan of Rs 1345.72 crore for clearing outstanding liabilities to NEEPCO and other power generating public sector undertakings.

Under the Central government’s ANBA, liquidity support of Rs 90,000 crore is extended to distribution companies (discoms) in the form of funds from the Power Finance Corporation and Rural Electrification Corporation.

Power minister, James P K Sangma informed after the cabinet meeting that the cabinet has approved the proposal for the MePDCL to avail an assistance restricted to Rs 1345.72 crore under the ANBA scheme.

“With this loan amount, the MePDCL will be able to clear all outstanding dues and at the same time the MePDCL would also be writing to the ministry of power and all generation companies for waiver of the delayed payment surcharges. We are asking them if they can give us more than 60 per cent waiver of the delayed payment surcharges,” Sangma said.

Recently, the Central government had announced various packages under ANBA, including liquidity support of Rs 90,000 crore for distribution companies (discoms) in the form of funds from the Power Finance Corporation and Rural Electrification Corporation.

Discoms will also be provided with the state government guaranteed loans exclusively for discharging their liabilities to power generation companies.

Under the scheme, the Rural Electrification Corporation and the Power Finance Corporation would extend special long term transition loan up to 10 years to the discom on certain conditions.

Sangma said that cabinet approval would also enhance the borrowing limit of the holding company, the Meghalaya Energy Corporation Limited (MeECL) by Rs 1,345.72 crore for the purpose, on and above, an existing borrowing limit of Rs 2500 crore.

According to the power minister, the state cabinet has agreed with certain conditions which include having a High Powered Committee (HPC) consisting of the chief secretary, a senior most secretary of finance, power, and planning departments to monitor the performance of the MePDCL on two major sector reforms which include bringing down the Aggregate Technical & Commercial (AT&C) losses and reduce the average cost of supply (ACS) and average revenue realised (ARR) gap.

The HPC will also oversee the additional industry sales and additional exchange sales of power through which the MePDCL could earn additional revenue, Sangma said, adding that the HPC would meet every month and make recommendations to the Board of the MeECL towards achieving the targets.

“These conditions were set forth and the cabinet has approved the loan of Rs 1,345.72 crore for the purpose of clearing outstanding dues of the MePDCL through the loan to be taken from the REC and PFC,” Sangma stated.