RE Producers can Move NCLT Against Discoms Over Dues: RK Singh

Flagging non-payment of dues by Discoms to renewable energy producers, RK Singh has cautioned states that the developers could approach NCLT

Flagging non-payment of dues by power discoms to renewable energy producers, Union Power Minister RK Singh has cautioned seven states, including Maharashtra and Karnataka, that the developers could approach NCLT against the distribution companies to recover payments of around Rs 5,355 crore.

Singh in a letter has urged the chief ministers of these states to issue directions to their respective power distribution companies (Discoms) for clearing the dues of renewable energy firms in the next few days.

The power and new & renewable energy minister pointed out the power producers are likely to default on their payment obligations due to non-clearance of dues by the discoms and there is a “danger” of them approaching the National Company Law Tribunal (NCLT) for recovering the pending amount.

According to the letter, discoms of Andhra Pradesh have the largest outstanding dues of Rs 2,000 crore, followed by Tamil Nadu (Rs 1,892.54 crore) and Telangana (Rs 1,565.08 crore).

Discoms of Maharashtra and Karnataka owe Rs 574.48 crore and Rs 737.20 crore, respectively, to various renewable energy producers, while that of Madhya Pradesh owe Rs 733.53 crore and Rajasthan‘s Rs 477.96 crore, Singh said.

“Due to the non-payment of dues, it is likely that many of these RE (renewable energy) power producers would default in making payment to Ireda (Indian Renewable Energy Development Agency) and other financial institutions. Any default would make them NPAs (non-performing assets),” the Union minister said.

“There is also a danger of RE power producers approaching the NCLT (National Company Law Tribunal) against distribution companies (regarding non-payment of dues),” he added.

Further, the minister told the chief ministers of Karnataka and Andhra Pradesh that the discoms in their states are reported to have outstanding dues of 112 crore and 243 crore, respectively, to Solar Energy Corporation of India.

Recently, the latest report issued by the Central Electricity Authority (CEA) has revealed that the total payment dues for the 513 active renewable energy projects in the country, as of July 31, 2019, now amounts to Rs 9735.6 crore.

In its findings, the CEA has also revealed that one one of the renewable developers withdrew its information submitted on August 12, 2019, regarding the payment dues of Rs 1722.5 crore. Accounting for which, the total dues would have been Rs 11458.1 crore.