Central government working on package to offer loans to discoms

The central government is working on a package to offer loans to state discoms to help them clear dues of gencos to prevent blackouts as the projects face a severe liquidity crisis. The MoP is arranging regular loans from the Power Finance Corporation and REC Limited for discoms that can be used only to clear a portion of the Rs 920 billion dues they owe power plants. As per the proposed plan, the financiers will pay the power plants on behalf of the discoms and this will show as debt on the books of the discoms.