Power gencos to get easier loans for coal imports

The centre will facilitate loans for coal imports to electricity generating companies through sector lenders to build coal inventories and keep projects running amid high demand.
The power ministry will ask Power Finance Corp (PFC) and REC Ltd to waive prudential norms for lending to power companies, specifically to buy imported coal for blending purposes as well as for running imported coal-based plants.

This is the first-time specific coal loans will be offered to generators, people familiar with the development said.

The government is relying on generation utilities to import coal to build stocks ahead of the rainy season to avert a power crisis. All generation projects have to import 10% of their requirement.

This would imply 22 million tonnes of coal imports by the State generation companies while private companies will bring in another 16 million tonnes.

In a penal measure, the power ministry on Wednesday said it will increase coal import targets to 15% in Q2 from the present 10% for plants that do not import coal as per the directive.

"The power ministry is coming up with a direction with dispensation to provide working capital loans to power generation companies for imported coal," a senior government official said. "The ministry will through a direction ask PFC and REC prudential norms to be waived for working capital loans for importing coal,"

The waiver will be for all generating companies - blending coal or imported coal-based plants. The letters to PFC and REC will be issued soon, he said.

Private power generating companies had earlier told the government they don't have money to buy imported coal since they haven't received payments from state-owned power retailers.

The Association of Power Producers had said the power developers are keen to import coal but sought a bridge financing mechanism from the government to fund coal imports.

Discom outstanding dues to power plants stand at a cumulative ₹1.03 lakh crore.

Power plants have coal stocks of about 20 million tonnes, enough to last for about eight days.

"We will look for our own security. Lenders have to take a call on a case-to-case basis as to what is the creditworthiness of the generating companies and what additional security we may need in such cases," an official in one of the lenders said, requesting anonymity.