The Andhra Pradesh government has approved ₹29.84 billion (~$415.67 million) to distribution companies (DISCOMs) in the state towards the payment of 25% of their losses, allowing them to clear their power dues.
This is good news for developers who are operating in the state and struggling financially. The allowance comes under the Ujwal DISCOM Assurance Yojana (UDAY) program, which aims to help the struggling state-run distribution companies by providing them the required financial assistance.
Of the approved amount, ₹21.99 billion (~$306.32 million) will go to central and state generating stations, and the rest will go to wind and solar generators for dues up to December 2019. Here is a breakup of power generators’ dues to be cleared:
Andhra Pradesh has been in the spotlight lately because of payment related issues. There has been a prolonged dispute between the state government and the Union government because of the state DISCOMs’ inability to pay for renewable energy for over a year. The state cited high solar and wind power prices as the reason for the delays, announcing that it would scrap all power purchase agreements for solar and wind tariffs signed during the previous government’s tenure, alleging corruption.
According to the most recent date on the Ministry of Power’s payment ratification and analysis portal called PRAAPTI, DISCOMs in Andhra Pradesh had outstanding dues amounting to ₹28.75 billion at the end of December 2019, with 1,175 overdue invoices.
Recently, the Andhra Pradesh High Court asked the state’s distribution companies including, Southern Power Distribution Company Limited (APSPDCL) and Eastern Power Distribution Company Limited (APEPDCL), to clear the dues of wind developers within two weeks. The dues currently amount to ₹1.7 billion (~$24.3 million).
Earlier, Mercom reported that outstanding dues to power generators from distribution companies at the end of October 2019 stood at ₹844.45 billion (~$11.83 billion), up by ₹297.76 billion (~$4.17 billion) or 54% from the same period last year.
Nithin is a staff reporter at Mercom India. Previously with Reuters News, he has covered oil, metals and agricultural commodity markets across global markets. He has also covered refinery and pipeline explosions, oil and gas leaks, Atlantic region hurricane developments, and other natural disasters. Nithin holds a Masters Degree in Applied Economics from Christ University, Bangalore and a Bachelor’s Degree in Commerce from Loyola College, Chennai.