CCEA may take up SEBs restructuring proposal on Thursday

The Cabinet Committee on Economic Affairs (CCEA) can take up the proposal for restructuring of discoms on Thursday. Discoms have an accumulated debt of close to Rs 2 lakh crore and one among the many features of this note s directed at improving discoms financial health, the state will take a burden of 50% of the debt and issue bonds against it in line with the fiscal space available with it.

The other 50% of debt will have to be restructured by the banks. There will be a moratorium of three years on the principal amount and an option of staggered payment for the next seven years. The discoms, will have to however, show improvement in the revenue within three years and cut down on AT&C losses to a designated level to be eligible for these benefits. This will surely bring good news to not only the power sector, but also the banks that are exposed to such massive amount of debts.