Power Min asks PFC and REC to arrange working capital loans for ICB power plants in bankruptcy proceedings

New Delhi: The Union Department of Energy led Power finance company (PFC) and Rural Electrification Company ( REC Ltd) to take the necessary steps to arrange short term loans for a period of six months with adequate collateral, for coal-based imports (AOI) plants that are stressed or NCLT, as soon as possible. These plants need working capital to buy coal and start generating electricity to restart their operations.

The Union Minister of Energy and New and Renewable Energy held a meeting on May 9, 2022 on issues related to the working capital of imported coal-fired power plants that are in difficulty or in NCLT.

Given the increase in demand and the unprecedented pressure on the domestic coal supply, the Ministry of Power, May 5 issued instructions to all ICBs under Section 11 of the Electricity Act 2003 to operate and produce electricity at full capacity, even for projects that are stressed or under NCLT. This guidance will ensure additional electricity generation from imported coal and will be a net addition.

Last week, the Department of Energy ordered all states and coal-fired generation projects to import at least 10% of their coal requirements for blending.

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“Electricity demand has increased by nearly 20% in energy terms. Domestic coal supply has increased, but the increase in supply is not sufficient to meet the increased demand for coal. electricity. This leads to load shedding in different areas. Due to the mismatch between the daily coal consumption for electricity generation and the daily coal receipt at the power plant, the power plant’s coal stocks have been declining at a rapid pace. worrying,” the ministry said.