MoP mandates payment security mechanism for gencos

The MoP has stated that a letter of credit should be mandatorily used as a payment security mechanism. Also, discoms that default on their payments to power generators under any long-term agreement will not be allowed to purchase short-term power from the open market. The MoP has also approved compensation to be paid by discoms to gencos in case of any deviation from the scheduling and despatch of power. Accordingly, the National Load Despatch Centre and regional load despatch centres will despatch power only after it is intimated by the genco and/discoms that a letter of credit for the desired quantum of power has been opened and copies made available to the concerned genco.

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