APP writes to finance ministry to mobilise unlocking of funds stuck In arbitrations and receivables from government agencies

The Association of Power Producers (APP) has written to the finance ministry highlighting the concerns of power debtors and extended litigations that have been egging the power sector.  

The letter brought forward one of the biggest challenges afflicting the power companies, the large overdue of receivables pending over long time, including regulatory dues. APP has suggested that a mechanism or policy framework should be formulated in the lines of the MSME Act and Consumer Dispute Resolution Act, wherein at least 75 per cent of the claim amount has to be paid by any party to file an appeal challenging the orders of regulatory commissions. APP has also requested GoI/RBI to undertake a specific TLTRO tranche of Rs 1000 billion focused on infrastructure companies with minimum investment grade rating to help power sector companies meet their capex requirement for setting up new projects in the renewable sector, for the environmental emission control equipment and for their working capital needs.  Further, to incentivize local manufacturers like BHEL, L&T and implement the Atmanirbhar Bharat scheme in power sector, it has suggested that GoI may provide interest subvention scheme for local manufacturers. Also, it has requested to allow one-time restructuring of all accounts, which were standard (i.e. overdue less than 90 days) as on 1st March 2020 & also permitting bilateral restructuring without insisting for Inter Creditor Agreement & escrow mechanism