Power Ministry To Give A Waiver To Power Plants From Advance Freight, Coal Payments


In the view of total lockdown due to coronavirus and inability of discoms to pay their dues, the Power plants have been exempted from advance coal and freight payments for three months.

This will give a major relief to generating firms and prevent supply disruption during the lockdown, particularly in the private sector. According to the Ministry this request came from the private power companies that constitute 35 per cent of Indian electricity generation base The State and central generating companies including NTPC also face the problems but the power ministry has directed them to supply electricity to even defaulting state electricity distribution companies through a three- month moratorium.

The official said power ministry has sought the exemption for three months from Coal and Railway ministries so as to maintain electricity supply as the country remains in lockdown till April 14.

The Reserve Bank has allowed financial institutions to give a moratorium of three months on repayment of loans, however, Covid-19 poses a challenge in terms of recovery of dues from state electricity distribution companies.

The Coal Ministry is evaluating the said the power ministry’s demand as there are Rs 14,000 crore outstanding receivables from state-run power projects.

There will be a major impact on India’s power sector with distribution companies halting payments to generation companies as states electricity departments are not taking coercive actions to recover bills from consumers. The usual recovery cycle of the electricity dues by state discoms happens in March every year. According to the Union power ministry, the outstanding amount of discoms stands at Rs 86,931 crore, of which Rs 76,063 crore is overdue.