Srinagar, Dec 12: To clear its outstanding electricity purchase payments, Jammu and Kashmir Government has raised Rs 11024.47 crore loan through Atmanirbhar Bharat Abhiyan under liquidity infusion scheme in DISCOMs.
An MoU for availing the second tranche of the loan for Rs 5444.47 crores was signed between JK Power Development Department, J&K Power Corporation Ltd. and Power Finance Corporation (PFC) in the presence of the Principal Secretary Power Development Department, Rohit Kansal at Srinagar on Saturday, an official spokesperson said.
The MoU was signed by the Director Finance PDD, MH Malik and Chief Engineer JKPCL, Mohammad Yousuf Baba and Madhu Chakraborty GM, L&D PFC. The MDs of the DISCOMS, Chief engineers of PDD and other senior officers were present on the occasion. The ED of the PFC Manoj Sharma joined the ceremony through video conferencing.
The agreement for availing of the first tranche of the loan for Rs 5580 crores had already been signed by the department with REC and PFC in October.
Under the Atmanirbhar Bharat Abhiyan, the Government of India had announced a special package of Rs 90000 crore for liquidity infusion in power distribution companies (discoms) for clearing of their power purchase liabilities to tide over financial crises owing to low power recoveries.
In pursuance, Jammu and Kashmir immediately started fulfilment of pre-loan requisites and signed the MoU for the first tranche of the loan of Rs 5580 crores through PFC and Rural Electrification Corporation (REC) in October 2020.
With the signing of today’s MoU J&K would be able to lift the full quantum of a loan of Rs 11024.47 crores allotted to it enabling it to fully liquidate its power purchase liabilities as accumulated on June 30, the spokesperson said.
“J&K has an annual power purchase bill of Rs 6000 crore to Rs 6500 crores against which the power recoveries are just Rs 2200 crore to Rs 2300 crore making for an annual deficit of Rs more than 4000 crores,” he said.
The power purchase liability of J&K towards various CPUs ending June 2020 had swollen to Rs 11500 crores which were being charged at a late payment surcharge (interest rate) of 18% per annum. The loan assistance will enable savings of nearly Rs 1000 crore to J&K on account of difference in the rate of interest (late payment surcharge) that was otherwise being charged by the creditors against these power purchase liabilities.