Discom dues liquidation scheme can help release Rs 9,000 cr past receivables of RE Gencos


The governments scheme to liquidate overdue can help release Rs 9,000 crore dues owed by the Discoms to renewable energy generation companies over the next two fiscal, according to Crisil.

The payment stretch has been one of the key risks for the RE sector. In March 2022, the leading RE GENCOS (renewable energy generation companies) had receivables of about six months, the agency said in a statement.

“The Ministry of Power scheme to liquidate overdue that distribution companies (Discoms) owe (to) generation companies (Gencos) can release the past receivables of the renewable energy (RE) sector of Rs 9,000 crore over the next two fiscals. Receivables period for leading RE GENCOS can be reduced by 40-50 days from 180 days now by March 2024,” it added.

Under the scheme, overdue, including past late payment surcharge (LPS) as on the cut-off date of June 3, 2022, will be converted into equated monthly instalments (EMIs) that discoms have to pay over 12 to 48 months based on different slabs.

Manish Gupta, Senior Director, Crisil Ratings, said, “The Rs 9,000 crore of liquidated dues can support equity investments in 24 gigawatts of under-implementation projects over the next two fiscals. Our calculation presumes financially stronger Discoms such as in Gujarat and Maharashtra would show better payment periods for RE projects compared to others that are expected to pay with an average delay of 3-5 months”.

(Except for the headline, this story has not been edited by The Federal staff and is auto-published from a syndicated feed.)