HomeEconomy How Narendra Modi initiatives helped discoms clear wind energy dues How Narendra Modi initiatives helped discoms clear wind energy dues
In a turnaround of financials of state discoms, like those of Maharashtra, Rajasthan and Madhya Pradesh, following government initiatives in the last one year, pending dues to wind energy companies have dropped to an average of four months from 13 months previously, industry officials told FE. Maharashtra State Electricity Distribution Company’s (MSEDCL) dues have dropped from over one year to around six months now, while Rajasthan has seen a maximum improvement with dues falling to less than two months. Madhya Pradesh has also improved to around three months now, officials said.
An MSEDCL spokesperson confirmed that the discom’s total dues have now fallen to Rs 440 crore from Rs 2,300 crore in February 2017. The company made last the payments in April but not to all companies. “We have cleared a majority of the Rs 2,300-crore pending dues, now around Rs 440 crore is pending to 320 generators that will be cleared soon,” the spokesperson said. “We were able to clear the dues as our overall collections improved in the last two quarters,” he said. Similarly, a Rajasthan discom official from Jaipur Vidyut Vitran Nigam said, “Relaxation under UDAY has helped us to pay our dues to the wind energy companies.”
Wind power producers confirmed that the lag in payments has fallen on average to four months as the government initiatives taken over the last two years have started to show results.
One of the wind power producers said, apart from benefits from the implementation of UDAY, the rationalisation of coal transport and logistics costs, and swapping of coal linkages have benefited utilities to reduce their inventory costs.
Parag Sharma, chief operating officer of ReNew Power, said, “Our dues pending from Rajasthan are now of hardly two months and from MP of three months. In the case of Maharashtra, there has been improvement but there is still six to seven months’ delay,” Sharma said.
Mytrah Energy has recovered the entire dues from Rajasthan, while they have a total of Rs 50 crore pending from Maharashtra. “We are confident that UDAY will help discoms to improve their finances, and going ahead, payments will not be a major problem,” said Vikram Kailas, CEO of Mytrah Energy.
The pending receivables from discoms had created near-default situations for many wind energy companies in the last couple of years. A lot of renewable power producers such as Renew Power, ACME Solar, Hindustan Cleanenergy, Indo Rama and Panama Wind Energy were not paid on time by MSEDCL.
According to the Power Finance Corporation’s report on the performance of state utilities, MSEDCL had accumulated losses worth Rs 7,087 crore as of March 31, 2015. While Rajasthan had accumulated losses of close to Rs 81,411 crore, Madhya Pradesh had accumulated losses of close to Rs 30,181 crore as of March 31, 2015.