PFC REC to directly repay discom loans

New Delhi: The government’s move to give large loans to power distribution companies to help them clear 88,000-crore power plant bills would be finalised in a couple of days as it would no longer require the approval of Union Cabinet. The special loans from Power Finance Corp (PFC) and REC Ltd are proposed to be given directly to power plants to clear ?88,000 crore dues on behalf of the discoms.

The government will not offer the loans to distribution companies under working capital heads and state guarantees to these loans will be within the powers of state legislature, doing away with the requirement of the approval of the Union Cabinet, a senior government official said.

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