Maharashtra: Rs 5,252 crore guarantee approved for state discom to clear power dues

Mumbai, Nov 19 (PTI) The Maharashtra government on Wednesday approved a guarantee for loans of Rs 5,252.28 crore to help the state-run power distribution company Mahavitaran clear pending dues of power generation and transmission utilities under the Centre's Late Payment Surcharge (LPS) Rules.

According to the Government Resolution (GR) issued on Wednesday, Mahavitaran will raise Rs 2,785.37 crore from HUDCO and Rs 2,766.90 crore from UCO Bank.

The GR states that this amounts to "Rs 5,252.28 crore (principal and interest combined)", which will be used to pay statutory monthly instalments for the 2025-26 financial year.

The GR notes that dues of power generators and transmission companies under the LPS rules stand at "Rs 17,252 crore".

Mahavitaran has been permitted to raise loans up to "Rs 29,230 crore (principal Rs 17,252 crore and interest Rs 11,978 crore)" across the five financial years from 2022-23 to 2026-27.

The state has earlier approved guarantees of "Rs 13,552.12 crore" and "Rs 7,619.69 crore", the GR added.

"The sanction issued on Wednesday approves guarantee cover for Rs 3,653.25 crore principal and Rs 1,899.02 crore interest, totalling Rs 5,252.28 crore. HUDCO will lend at an interest rate of 8.95 per cent, while UCO Bank will lend at 8.45 per cent," the GR said.

The government has clarified that the guarantee will remain limited to Rs 5,252.28 crore only and will not extend to any penalty or additional charges arising from repayment delays.

The GR states that Mahavitaran must provide adequate security to the lending institutions, ensure regular monitoring of loan repayment, and submit financial statements every six months.

It also warns that any violation of conditions, including misuse of loan funds or failure to maintain collateral, will render the guarantee invalid.

The state Cabinet has waived the guarantee fees for the sanctioned amount, and monitoring responsibility has been assigned to designated officers of the energy department. PTI ND NSK