Government's scheme to liquidate overdue to help release Rs 9,000 crore dues owed by Discoms to RE Gencos: Crisil
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Crisil Ratings in its latest report has said that the government's scheme to liquidate overdue can help release Rs 9,000 crore dues owed by the distribution companies (discoms) to renewable energy (RE) generation companies (Gencos) over the next two fiscal. It said the payment stretch has been one of the key risks for the RE sector. In March 2022, the leading RE Gencos had receivables of about six months.
According to the report, receivables period for leading RE Gencos can be reduced by 40-50 days from 180 days now by March 2024. It noted that under the scheme, overdue, including past late payment surcharge (LPS) as on the cut-off date of June 3, 2022, will be converted into equated monthly instalments (EMIs) that discoms have to pay over 12 to 48 months based on different slabs.
The report further said the Rs 9,000 crore of liquidated dues can support equity investments in 24 gigawatts of under-implementation projects over the next two fiscals. It said ‘our calculation presumes financially stronger Discoms - such as in Gujarat and Maharashtra - would show better payment periods for RE projects compared to others that are expected to pay with an average delay of 3-5 months.’
