New restructuring package for state discoms a positive: Fitch

Terming the new restructuring package offered to state discoms as a positive, Fitch today said states opting for the package and delivering on loss reductions over the medium-term is essential for the success of the programme.

“The agency sees the new restructuring package offered to the state discoms in November 2015 as a positive,” the rating agency said in a statement.

Successfully addressing the weak financial positions of state distribution companies (discoms) is key to improving the health of India’s power sector, it added.

The weak fiscal position of these entities has led to sustained delays in payment to market participants and weak offtake from power generators, in addition to increasing the risks associated with much-needed investment in the sector, it further said.

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