tangedco: Tn urges Center to reduce interest on Tangedco loans | Chennai News

Chennai: Hard hit by the funds crisis, the government of Tamil Nadu on Thursday urged the Center to reduce the interest rate to 8.5% for loans granted by central agencies, Power Finance Corporation (PFC), Rural Electrification Corporation (REC) and Indian Renewable Energy Development Agency (IREDA) at Tangedco, the state power company. The current interest rate ranging from 9.5% to 12.65% results in the payment of 7,000 crore in interest per year, and a reduction in the interest rate would mean savings of 1,400 crore per year, the report said. sources.
In a memorandum submitted to Union Electricity Minister RK Singh, a copy of which is available from TOI, Tamil Nadu Electricity Minister V Senthil Balaji said Tangedco’s activities were in high demand. capital intensive and that interest expense represented a significant portion of its income expenditure. At least 80% of Tangedco’s capital expenditure is supported by these financial institutions. “Tangedco, like other utilities, has suffered huge revenue losses due to the Covid epidemic. Despite the strict (strained) cash flow, Tangedco clears its loan and unpaid interest promptly without any defaults, ”Balaji said, while demanding that the Center consider withdrawing the Electricity (Amendment) Bill, 2021 and allows state-owned distribution licensees to continue to provide quality electricity at affordable rates. Senior state government officials said the Union government has responded positively, taking into account the demands made by the state.


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