Loans Worth Rs 1.25 Lakh Cr so far Under Discoms Liquidity Package

Loans worth nearly Rs 1.25 lakh crore have been sanctioned so far by PFC and REC Ltd under the liquidity package for stressed power Discoms

Loans worth nearly Rs 1.25 lakh crore have been sanctioned so far by state-owned non-banking finance firms Power Finance Corporation (PFC) and REC Ltd under the liquidity package for stressed power distribution utilities (Discoms), Power Minister RK Singh has informed the upper house of the Parliament.

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In May last year, Finance Minister Nirmala Sitharaman had announced a Rs 90,000 crore liquidity infusion into cash-strapped Discoms facing demand slump due to the COVID-19 crisis. This package was later increased to Rs 1.2 lakh crore by the Ministry of Power. Under the liquidity package loans worth Rs 1,24,999 crore — including Rs 65,932 crore by REC and Rs 59,067 crore by PFC — has been sanctioned as of January 27, 2021, R K Singh stated in a written reply to the Rajya Sabha.

“So far, loans to the extent of Rs 1,25,000 crore have already been sanctioned and Rs 46,074 crore have been disbursed,” Singh said.

The package was aimed to help Discoms to reduce their outstanding dues. Besides, it would reduce stress on the Power Gencos and Transcos as their payments are stuck with Discoms.

According to Singh, an amount of Rs 46,074 crore — including Rs 24,204 crore by REC and Rs 21,870 crore by PFC — has been disbursed under the package to states. Among the states which sought finance under the scheme, Tamil Nadu tops the chart with Rs 30,230 crore sanctioned loan followed by Uttar Pradesh at Rs 27,432 crore and Maharashtra at Rs 14,310 crore.

“The disbursement under the long term transition loans have been linked with Discoms undertaking certain reform measures such as installing pre-paid smart meters, as well as laying down the trajectory for preventing AT&C losses, ACS-ARR gaps, recovery of subsidy and government dues.”

According to the Power Ministry’s PRAAPTI (Payment Ratification And Analysis in Power procurement for bringing Transparency in Invoicing of generators) portal, Discoms total dues owed to power producers i.e. generation companies (Gencos) rose by over 35 percent year-on-year (YoY) to reach Rs 141621 crore (Rs 1.41 lakh crore) in November 2020. During the month, the total overdue amount, which was not cleared even after the 45 days of grace period offered by generators, stood at Rs 1,29,868 crore as against Rs 93,215 crore in the year-ago period.

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Ayush Verma

Ayush is a staff writer at and writes on renewable energy with a special focus on solar and wind. Prior to this, as an engineering graduate trying to find his niche in the energy journalism segment, he worked as a correspondent for