KSEB to take Rs 230 cr loan to meet financial crisis
Thrissur: The Kerala State Electricity Board has decided to take a loan of Rs 230 crore from Rural Electrification Corporation Ltd (REC) to overcome the financial crisis. The director board has planned to take the loan at an interest rate of 10.65 percent from REC which is a public sector finance company under the central government.
KSEB has taken the decision in view of incurring an annual loss of Rs 1500 crore. At present, KSEB is unable to clear the payments of the power purchased from outside.
At the same time, according to the records of finance department, KSEB has to settle the payment of Rs 350 crore as arrears of salary, pension and power purchase till June 20.
Earlier in 2017, REC had sanctioned Rs 2000 crore as special loan to KSEB. In this fund, KSEB has received Rs 1250 crore at an interest rate of 9.08 percent. Later, KSEB borrowed Rs 520 crore as two times at an interest rate from 9.08 percent and 11 percent in 2018 and 2019.
Now, KSEB has claimed Rs 250 crore from the fund of Rs 2000 crore which was sanctioned by REC.
Meanwhile, REC has taken a firm stand that the loan will be sanctioned at an interest rate of 10.90 percent as per the monetary policy. But REC has cut down 0.25 percent from the interest rate as requested by KSEB.
Hike in interest rate
A steep rise in the interest rate of loan was occurred after banks refused to give priority to the power sector. Banks have reduced the priority given to power sector after observing that the states which purchase power from private agencies have incurred huge amount as arrears.
KSEB need more loans
KSEB is implementing new projects to expand the power production. Hence, the board has to take crores of rupees from other agencies too.
According to reports, KSEB need Rs 3300 crore to implement solar power projects. At the same time, there is a demand of Rs 4600 crore to boost up the power supply. In order to implement, TransGrid projects, KSEB has to raise Rs 4500 crore and Rs 6000 crore in first and second phase respectively.