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“DISCOMs which are making heavy losses (above 15 per cent) will not be granted any loans for capital expenditure or non-capital expenditure unless they draw up a road map for reducing the losses over a definite time frame (not more than 2 years),” said RK Singh, Minister of State (Independent Charge) Power and New and Renewable Energy.
The Minister has also directed Rural Electrification Corporation (REC) and Power Finance Corporation (PFC), two financing institutions of Power Ministry, to not give loans to DISCOMs making heavy losses until they take steps to reduce them.
He added that several distribution companies have been making heavy transmission and distribution (T&D) losses which will make it difficult for them to repay the loans.
The DISCOMs will also have to show that they are working in accordance with the road map. The process will then be assessed by the Power Ministry and only then grant of loan would be considered for these DISCOMs.
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