MSEB is facing a resource crunch because of the four months of lockdown due to Covid-19.
MUMBAI: Maharashtra government will stand guarantee for a Rs 20,000 crore loan to be secured by the Maharashtra State Electricity Board (MSEB) and the subsidiaries under it. MSEB is facing a resource crunch because of the four months of lockdown due to Covid-19.
A government resolution (GR) issued by deputy secretary P P Badgeri proposed to secure the loan from the National Thermal Power Corporation, Power Finance Corporation, Rural Electrification Corporation, nationalised banks and leading financial institutions.
The MSEB has not had need for such a large loan for years now.
The GR said that the Covid-19 pandemic had had an adverse impact on the power sector and the daily average demand in the state had reduced from 23,000 MW to 16,000 MW as a large number of industries remained shut.
“MSEB as well as generation, distribution and transmission corporations will have to face resource crunch in view of concessions granted by the Maharashtra Electricity Regulatory Commission granted to industrial and commercial sector as well as relief granted by the state government,” the GR said.
An energy department official said that while several measures were discussed to tackle the deteriorating financial conditions, one option was to secure loans from leading financial firms as long as it came at a low rate and the state government stood guarantee.
“The state cabinet on June 9 approved a proposal to stand guarantee, following which the MSEB and other companies will now approach the financial institutions for loans,” the official said. “The government has agreed to waive the guarantee fee.”
The official said a high-level committee headed by the chief secretary and with secretaries of the departments of finance, planning and energy as members, had been set up to work out the terms and conditions for loan.
“Before submitting the loan proposal, the department will have to specifically state as to how the loan will be refunded; in fact a time-bound action plan will have to be submitted to the government,” he said.
Source: TNN
