VIJAYAWADA: With the State government implementing the mandated reforms in power sector such as introducing direct benefit transfer (DBT) in agriculture power subsidy disbursal and others, the Union government is set to release the second tranche of Rs 3,300 crore for Andhra Pradesh power utilities under Aatma Nirbhar Bharat Abhiyan loan.
MoS Power RK Singh is said to have given directions to the authorities concerned in the ministry to release the loan to AP along with other states.
Energy Secretary Srikant Nagulapalli, speaking on the occasion of 72nd Republic Day celebrations at Vidyut Soudha on Tuesday, said that the Union minister expressed happiness over the power sector reforms initiated by the Andhra Pradesh government and congratulated Chief Minister YS Jagan Mohan Reddy for introducing DBT for free agriculture power.
It may be recalled that the Centre, as a part of bringing in reforms in the power sector to make it sustainable and to support the Discoms during COVID-19 crisis, had announced various performance-linked initiatives in May, 2020, as a part of Aatma Nirbhar Bharat Abhiyan.
It had announced that the power sector reforms would give States a freedom to borrow an additional 0.25 per cent of its GDP. Of the 0.25 per cent of GDP borrowing linked to power sector reforms, the States can avail 0.15 per cent if they roll out the DBT to all farmers at least in one district by December 31, 2020, 0.05 per cent each if they reduce Discoms’ aggregate technical and commercial (ATand C) losses and the gap between average cost of supply and average revenue realisation (ACS-ARR gap).
Based on the performance of the above three parameters, the power ministry will facilitate additional borrowing by Jan 31, 2021. The energy department has been implementing DBT of agriculture power subsidy in Srikakulam from September 2020, on a pilot basis, and is working to roll it out in the other districts from April 2021.
While the first tranche of the total Rs 6,600 crore has already been released last year, the second would be done by Power Finance Corporation (PFC) Ltd/ Rural Electrification Corporation (REC) Ltd shortly, the officials added.
The Energy secretary added that the state government has initiated steps to bring down the power purchase costs and make Discoms financially sustainable. The power utilities procured 6,320 MU power from the open market during the current financial year. "The average cost of procurement, including transmission charges is Rs 3.12 per unit against the approved cost of Rs 4.55 per unit," the secretary explained.
In the last week of December, 2020, New-Delhi based National Solar Energy Federation of India, an umbrella organisation representing solar energy companies, has submitted a representation to Union Power Minister RK Singh seeking his intervention in the release of funds under Aatma Nirbhar Bharat to renewable energy generation companies which have power purchase agreements with AP Discoms. They claimed the payables were pending since April, 2020, and delay in clearing bills may result in the companies defaulting loans and turning into non-performing assets.
Money to be credited into accounts of generators
The funds released under the Aatma Nirbhar Bharat initiative would directly be credited into the accounts of the generators to whom the power distribution companies (Discoms) are to make payments, according to energy department officials. Union Minister of State for Power RK Singh is said to have given directions to the authorities concerned in the ministry to release the loan to AP.