Senthilbalaji urges Centre to reduce Tangedco’s loan interest rate to 7%
The minister said that the average cost of supply and the average rate of return gap are projected to come down to Rs 0.49 per unit from the previous year's Rs 1.24 per unit and it is expected to come down further to Rs 0.02 per unit.
Minister V Senthilbalaji urged the Renewable Energy Corporation (REC) and Power Finance Corporation (PFC) to reduce the loan interest of Tangedco
CHENNAI: Electricity Minister V Senthilbalaji on Tuesday urged the Renewable Energy Corporation (REC) and Power Finance Corporation (PFC) to reduce the loan interest of Tangedco to 8 per cent.
"Due to continuous efforts and reforms undertaken by the State, the annual interest cost has been reduced by various lenders to 10.5 per cent. I request REC and PFC to consider reducing the interest rate to 8 per cent given the commitment shown by TN in improving the financial and operational performance of the state power utilities," he said while addressing at Power Ministers Conference in New Delhi, presided over by Union Power Minister Manohar Lal.
The minister said that the average cost of supply and the average rate of return gap are projected to come down to Rs 0.49 per unit from the previous year's Rs 1.24 per unit and it is expected to come down further to Rs 0.02 per unit. "Despite an expected EBITDA (earnings before interest, taxes, depreciation, and amortization) of Rs 15,843 crore in 2023-24, the Tamil Nadu Power Distribution Corporation Ltd (TNPDCL) continues to incur losses due to significant interest burden accumulated from previous years," he said.
Senthilbalaji also urged the Union Power Minister that no new conditions be imposed for the Revamped Distribution Sector Scheme (RDSS) grants, including unilateral fixing of targets for PM Surya Ghar - Muft Bijli Yojana. Pointing to the awarding of the loss reduction works totalling Rs 8,933 crore which would be completed within the target period, he noted that the Power Ministry in June 2024 introduced an additional requirement to sign an MoU under the Muft Bijli Yojana which requires the state to achieve targets set by the monitoring committee.
The minister also said that the TNPDCL has authorised the Solar Energy Corporation of India (SECI) to invite bids for a 4,000 MWh battery energy storage system (BESS) project in the state based on a tariff-based competitive bidding process. He demanded that a single, unified RPO be implemented, rather than categorising them based on specific sources like wind or hydro. "The power generated from the offshore windmills may be given to the state through state connectivity instead of central connectivity," he said.
