The loans would be sanctioned to states at cost plus a nominal fee to clear dues worth Rs 67,237 crore owed to gencos till August-end.
The Centre may tie up concessional loans from Power Finance Corporation (PFC), Rural Electrification Corporation (REC) and Indian Renewable Energy Development Agency (IREDA) for state governments as it looks to set the house in order in the clean energy sector, according to a report in Mint.
The loans would be sanctioned to states at cost plus a nominal fee to clear dues worth Rs 67,237 crore owed to power generation companies (gencos) till August-end.
Moneycontrol could not independently verify the report.
To receive loans, states need to give an undertaking that future payments to renewable energy (RE) generators would be on time. The amounts sanctioned would have to be strictly used for payments to RE generators on a first in first out basis, the report said.
States will also be required to either offer a sovereign or escrow guarantee or increase revenue streams to the lender. These measures have been placed to mitigate non-performing assets (NPAs), it quoted a senior government official.Solar and wind power tariffs are at all-time lows. Banks suspect the projects' viabilities suspect and are wary of lending to the sector. Dues in some cases date back to two to 15 months.LIVE NOW... Video series on How to Double Your Monthly Income... where Rahul Shah, Ex-Swiss Investment Banker and one of India's leading experts on wealth building, reveals his secret strategies for the first time ever. Register here to watch it for FREE.