Cash strapped Meghalaya Energy Corporation Limited (MeECL) got some relief from the recent decision by Power Finance Corporation (PFC) and Rural Electrification Corporation (REC) to reduce lending rates up to 2 per cent.
Both PFC and REC have together decided to reduce lending rate up to 2 per cent from April 1. The two central public sector enterprises under the Ministry of Power said that the reduction in lending rates will help them offer lower rates to power utilities, which will reduce their borrowing costs thereby reducing their interest payments and in turn benefitting the end consumer in terms of lower tariff.
It may be mentioned that the Central government had announced a liquidity infusion scheme under Atma Nirbhar Bharat Abhiyan in May 2020 to enable power distribution companies (discoms) to liquidate their dues to the Central power generating companies and transmission companies.
Under this scheme, PFC and REC have extended a Special Long Term Transition Loan of Rs 1,345.72 crore to Meghalaya Power Distribution Company Limited (MePDCL), a subsidiary of MeECL, to liquidate its dues.
Out of this Special Long Term Transition Loan, MePDCL has paid an amount of Rs 127.53 crore of Rs 504.41 crore to NEEPCO on March 19, towards partial liquidation of the outstanding dues. MePCL has also given a commitment to pay the amount due and payable to NEEPCO in three equal installments on or before April 30, May 31 and June 30 on best effort basis.
The NEEPCO however maintained that further course of action by NEEPCO will be guided by the outcome of the updates on the steps taken by the MeECL to clear the dues within the stipulated deadlines.
Similarly, the total dues of MeECL to Power Grid towards power transmission charges have grown to over Rs 56.89 crore, out of which an amount Rs 46.51 crore is outstanding for more than 45 days.
Power Grid has warned of regulation of power supply to Meghalaya from midnight of April 14 in case of failure by MeECL to clear the total outstanding dues of more than 60 days latest by April 8.
For this too, Meghalaya has written to PFC and REC to release an amount of Rs 25.78 crore to Power Grid.
Under Atma Nirbhar Bharat Abhiyan, the Central government has decided to infuse liquidity of Rs 90,000 crore in the power sector through PFC and REC to enable the sector to maintain power supplies.
Under this intervention, PFC and REC would extend special long term transition loans up to ten years to power distribution companies (discoms) for liquidating outstanding dues of government owned generation and transmission companies, independent power producers and renewable energy generators.