PFC, REC to lend Rs 10,000 cr to TN electricity board

The two public sector units will lend Rs 5000 cr each to the board, which has a debt of Rs 45,000 cr

Power Finance Corporation and Rural Electrification Corporation each will issue Rs 5,000 crore as financial support to the Tamil Nadu Electricity Board (TNEB). The board has a debt of Rs 45,000 crore .

Chief minister J Jayalalithaa, in an announcement after a review meeting with ministers and TNEB officials, said the state government would extend guarantee to the two public sector units.

The government would also absorb Rs 9,529 crore, which is around 50 per cent of the short-term and long-term loans of TNEB according to the discussions held with the power and finance ministry officials in connection with the Chaturvedi Committee report on Financial Restructuring Plan for electricity boards.

The state government in an effort to support the state electricity board, has announced a financial assistance, including issuing Rs 1,000 crore as advance subsidy for its operations.

The government has also announced Rs 1,294 crore, around 30 per cent of the total loss expected to the board in this fiscal year. It has, in this fiscal, sanctioned Rs 3020 crore as subsidy and Rs 1,500 crore for new power generation programmes. During, 2011-12, it had allocated around Rs 7,913.45 crore to the board.

The chief minister said the accumulated loss of TNEB went up to Rs 54,500 crore and outstanding loans increased to Rs 46,500 crore during the previous government.

The state also had a due of Rs 11,000 crore to power producers along with others.