BHUBANESWAR: The State Government has decided to sanction guarantee of `3,000 crore in favour of GRIDCO for loans already availed and to be availed. A proposal to this effect was approved at a meeting of the Cabinet presided over by Chief Minister Naveen Patnaik on Friday. The Government guarantee will be for three financial years from 2016-17 to 2018-19.
Chief secretary AP Padhi told mediapersons that in order to ensure payment to generators on time, GRIDCO avails loans from various financial institutions apart from raising finance from market through bonds. Such loans are usually guaranteed by the State Government because of which GRIDCO avails benefit of lower interest rate, he said.
Stating that the loans are regularly serviced by GRIDCO, the Chief Secretary said GRIDCO has paid back loans of `3,157.85 crore and surrendered Government guarantee of the same amount. GRIDCO has now submitted a proposal for sanction of Government guarantee for loans already availed and to be availed during the three financial years against the `3,157.85 crore guarantee surrendered, he said.
Padhi said with the reduction of AT&C loss and growth of industrial power demand, the performance of Distribution companies are improving. Further revival of power market would help GRIDCO to sell its surplus power to earn additional revenue. GRIDCO is expecting to be cash surplus to square up the loan dues in near future, he added.