PFC head says discoms bond issue under Uday easing liquidity, not hurting profit

NEW DELHI: The implementation of central government initiated reform plan for stresses power distribution company has eased the liquidity situation without hurting profits, Power Finance Corporation Chairman and Managing Director M.K. Goel said.

“There were a lot of apprehensions around Uday in the market but UP and Rajasthan has issues bonds so far and what we see is that it is improving our liquidity situation. Also, there is no negative impact on our assets,” Goel said at the sidelines of the launch of ET Energy World.

The central government has launched the Ujjwal Discom Assurance Yojana or Uday to facilitate the revival of discoms which have been struggling with losses and mounting debt. Jharkhand, Chhattisgarh, Rajasthan and even non-BJP rules states such as Uttar Pradesh have joined the scheme which is aimed at reducing their financial stress and improving efficiency.

Rajasthan issues bonds worth Rs 28,455 crore under Uday scheme to 26 banks at an interest rate of 8.39%. Uttar Pradesh has raised around Rs 4,000 crore.

“We are confident of meeting out disbursal and fund raising targets for FY16. In FY17, the funds from these discoms will give us access to additional money that we can use for new initiatives like funding renewable projects,” Goel said.

He said that PFC raised around Rs 45,000-50,000 crore in 2015-16 to finance credit to power sector.

“We hope 4-5 other states like Punjab and Chhatisgarh to issue bonds soon under Uday. Things are moving fast,” Goel said.