Finally the banks have agreed to provide Rs. 13,000 crore as loan to UP Power Corporation limited (UPPCl) under financial restructuring plan (FRP).
Burdened with huge financial losses, the power corporation since long was finding itself unable to pay dues of various government agencies and private power trading companies. The monitory crunch also has unabled it from purchasing additional power while state is reeling under acute crisis of power supply this summer.
The cabinet of Akhilesh Yadav government, aiming to bail out the power corporation from severe financial crunch, had given approval for FRP last month on conditions of privatisation of power distribution in four mega cities of UP.
After several meetings with officials in New Delhi and lucknow, the banks have agreed on providing loan to power corporation. Still few formalities are remaining which are to be fulfilled at level of banks. We hope first instalment of fund could be released by first week of June, said, director (Finance), SK Agrawal with power corporation on Monday.
The power corporation will be getting loans from a consortium, involving 21 major banks of the country, headed by Punjab National Bank (PNB). The amount each bank in consortium will be providing as the loan is to be decided by nodal bank PNB, he said.
Currently UPPCl is burdened with a loss of Rs 9,000 crore which has to be paid as the price of energy incurred from various government agencies involving Rajya Vidyut Utpadan Nigam limited (RVUNl), Jal Vidyut Nigam (JVN), Transmission Corporation and a few private power trading companies.
Recently the RVUNl in a letter to power corporation have asked to pay previous dues as its thermal power plants could be run smoothly.
On other hand many engineering and employee organisations are gearing up to launch protest against FRP as it have conditions attached forcing state government to privatise the power sector in UP.