MoU Signed For Availing Second Tranche Of Rs 11024.47 Cr Loan
Srinagar: The Jammu and Kashmir administration on Saturday signed another MoU for availing second tranche of Rs 11024.47 crore loan assistance approved under the Atmanirbhar Bharat Abhiyan to clear the outstanding payments of power purchases.
An MoU for availing the second tranche of the loan amounting Rs. 5444.47 crores was signed between JK Power Development Department, J&K Power Corporation Ltd. and Power Finance Corporation in the presence of the Principal Secretary Power Development Department, Rohit Kansal at Srinagar on Saturday, an official spokesperson said.
The MoU, he said, was signed by the Director Finance PDD, M. H 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 this year,” the official spokesperson said.
With the signing of today’s MoU, he said, J&K would be able to lift the full quantum of loan of Rs 11024.47 crores allotted to it enabling it to fully liquidate its power purchase liabilities as accumulated on June 30, 2020.
He further said that under the Atmanirbhar Bharat Abhiyan, the Government of India had announced a special package of Rs 90000 crore for liquidity infusion in 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 fulfillment of pre-loan requisites and signed the MoU for the first tranche of the loan of Rs. 5580 crores through identified financial organizations i.e Power Finance Corporation Ltd. (PFC) and Rural Electrification Corporation Ltd (REC) in October 2020,” the official spokesperson said.
He said that J&K has an annual power purchase bill of Rs. 6000 to 6500 crores against which the power recoveries are just 2200 crore to 2300 crore making for an annual deficit of over Rs 4000 crores.
“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 (late payment surcharge). The loan assistance will enable savings of nearly Rs. 1000 crore to J&K on account of difference in rate of interest (late payment surcharge) that was otherwise being charged by the creditors against these power purchase liabilities,” the official spokesperson added.
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