– By Ranjana Konatt, Editor (Brand Positioning)
On Wednesday, May 13th 2020, Finance Minister Nirmala Sitharaman announced a special scheme for the power distribution sector wherein Rs 90,000-crore would be infused in distribution companies (DISCOMs). While giving details of the 20-lakh crore relief package announced by the government to revive economic growth, she said: “DISCOMs are today facing unprecedented cash flow problems and desperately need help otherwise they are unable to pay power generating companies.” Senior officials asserted that the amount made available by the Power Finance Corporation (PFC) and Rural Electrification Corporation (REC) will be used by DISCOMS to pay their dues to transmission and generation firms. PFC and REC are power sector non-banking financial companies (NBFCs).
Rajiv Srivastava, CEO & MD, Indian Energy Exchange, shared his views on the development. He said: “The most remunerative source of income for DISCOMs from industrial and commercial users has been deeply impacted by the COVID-19 lockdown.” Adding, he said that the measures like PFC/ REC loans, rebates and reforms announced by the Central Government will go a long way in creating the much-needed fiscal space in the power sector value chain. “At IEX, we have been at the forefront to support DISCOMs in their dual role of ensuring 24×7 uninterrupted power availability as well as enabling optimization that improves financial liquidity during the crisis,” Srivastava said. Elaborating, he said that they have met increased domestic demand as well as demand from the stressed healthcare and utilities sector and replaced costlier generation with low cost power available on the Exchange, thereby reducing power procurement costs leading to significant savings.