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Power companies seek sustainability in investments, send Sos to government on contributions

Mainly state-run power distribution companies owe power generation companies more than Rs 96,000 crore in November 2021. CNBCTV18 learns that the Association of Electricity Producers (APP) has requested immediate intervention of the Ministry of Energy to find a solution for the sustainability of the current and the potential investments.

The association of electricity producers met with electricity minister RK Singh on Monday in the presence of electricity secretary Alok Kumar and representatives of the Power Finance Corporation (PFC) and the Rural Electrification Corporation (REC).

State-run nightclubs owe over Rs 51,000 crore to private power companies and nearly Rs 20,000 crore are pending for renewable energy companies. The channel learned that the association had raised the issue of late payment for discos and recalled that a solution was needed to sustain the investments made in the electricity sector. He also pointed out that late payment can potentially jeopardize existing and potential investments.

“It is necessary to sustain current investments and investors must remain interested in the electricity sector. There must be a framework designed by the government to ensure that power producers are paid on time for the electricity sold. It is necessary to generate a positive sentiment for new investments. The vicious circle of late payments must be broken into a virtuous circle, the current position on investment is not sustainable, ”said AK Khurana, CEO of the Association of Electricity Producers.

The association also informed the ministry that private power companies are at a stage where they need to publish electricity regulatory notices. At the same time, the ministry urged companies to apply payment security mechanisms.

Some of the states with significant delays include Tamil Nadu, Maharashtra, Rajasthan, Uttar Pradesh, Madhya Pradesh, and Karnataka. The total overdue amount of discoms to power generation companies at the start of November 2021 stood at Rs 96,170 crore.

(Edited by : Kanishka Sarkar)


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