IAC Virtual Roundtable with Mr. Vivek Kumar Dewangan, Joint Secretary, Ministry of Power on COVID Relief Package for Power Sector on June 25, 2020 New Delhi
On June 25, IAC organized a Virtual Roundtable with Mr. Vivek Kumar Dewangan, Joint Secretary, Ministry of Power to discuss the adverse impact of COVID pandemic on the power sector finances and mitigating measures to resolve the acute liquidity crisis for member companies across the value chain in the power sector. Ministry of Power (MoP), Joint Secretary Mritunjay Kumar Narayan also joined the meeting.
In addition to Mr. Dewangan, the speakers included Michael Satin, Director of the Clean Energy and Environment Office, USAID India; Hemant Sahai, Founding Partner at HSA Advocates; and Nathan Halat, Energy Unit Chief, U.S. State Department. The webinar also included other senior officials from GoI, USG and corporate leaders from member companies such as GE, SB Energy, O2 Power, ReNew Power, Tata Power, Hindustan Powerprojects, Manikaran Power, BRPL, BYPL, HIS Markit, Cummins, ICF Consulting, OSI India, Avaada, AES India, UL, Vibrant Energy.
JS Dewangan mentioned that Government of India has announced a Rs. 90,000 Crore Liquidity package for DISCOMs who are facing an unprecedented cash flow problem due to COVID19. It was announced that the liquidity infusion to dicsoms will be given against receivables and that loans would be given against state guarantees for "the exclusive purpose of discharging liabilities of discoms to gencos".
As per MoP’s calculations, this infusion will allow state utilities to pay dues till March 31st, 2020. The first tranche of Rs. 45,000 crores of the infusion, will be made available by the end of July 2020, and utilities will be able to avail the same via NBFCs – Power Finance Corporation (PFC) and Rural Electrification Corporation Ltd (REC) – against state guarantees.
Member companies welcomed this move as this will add much needed liquidity in the market, and allow for an increased role of the private sector in this space. During the discussion, MoP also highlighted the criticality of the private industry in the development, innovation, and sustainability of the power sector of India. MoP has also been in conversations with multilateral and development institutions to further improve the fiscal health of the power sector in India as well as bring more innovation in the country. The outcome of the virtual roundtable was to share a readout from the meeting with MoP for their consideration in implementing the relief package.
