0

0

0

0

0

0

0

0

0

energy | IST

COVID-19: Expect more pressure on power demand if lockdown persists, says NHPC

The power ministry is working on a liquidity package for the sector and it has also issued a host of clarifications on relaxations for the distribution companies (DISCOMS).
AK Singh, CMD of NHPC and Rajeev Sharma, CMD, Power Finance Corporation (PFC) on Wednesday discussed issues related to the sector.
“After this scheme of 90-days moratorium, we have finalised our scheme for moratorium and our board has approved this and some DISCOMs are paying, some are not but I think as the situation unfolds, I am expecting the payments but we have prepared an action plan also for these three months to mobilise funds because we need to make repayments also for our borrowings but I don’t see any problem. There is enough liquidity in the market,” said Sharma.
Detailing the liquidity package which the government is pondering over, Sharma added, “It is under advanced stage of discussion with the ministry of power."
"We are requesting for a robust payment security mechanism as we extend further loans to DISCOMs, we are asking for a state government guarantee along with a provision in their annual budget for our repayments. We are with the government. Very soon, this liquidity infusion scheme will be out and REC and PFC will be helping the state DISCOMs to pay the receivables.”
When asked what will be the impact if for three months DISCOMs don’t pay at all, Singh replied, “We have been getting money from the DISCOMs, that is not a big issue.”
“Just 21-day lockdown is not going to create much problem for us and it is not going to last more also. We are planning to restart the project which is on hold right now. So, I don’t think there is going to be much difference on this account for a company like us,” Singh added.
Power demand has declined 25-30 percent. If the lockdown continues, this will put further pressure on DISCOMs and there will be more stress on balance-sheets, Singh further mentioned.
“As of now, I don’t see any problem of liquidity in the market. Enough money is available. Long-term Repo Operations (LTRO) has been declared by Reserve Bank of India (RBI), we are in consultation with State Bank of India (SBI)."
"It is cheaper money and banks can lend it over and above their exposure limits. In LTRO, that limit won’t be applied, so we are in consultation with SBI for that and with other banks also for commercial papers and other taxable bonds also,” Sharma explained.