Andhra Pradesh to borrow from SBI to pay REC

The government of Andhra Pradesh has reportedly decided to borrow 1,500 crore rupees from the State Bank of India to partially clear the loans obtained from the Rural Electrification Corporation in order to avoid being declared “in default” by the government organization. central.

According to a section of reports, Jagan Mohan Reddy’s government enlisted the help of its investment adviser Rajnish Kumar, a former SBI chairman, to use his good offices in securing an urgent loan of Rs 2,500 crore to clear owed loans. to be reimbursed to the CER.

The adviser managed to secure a 1,500 crore rupee loan using his contacts at SBI in Mumbai, so he can help the state pay off the loan and get out of the crisis now, according to reports.

The REC and the Power Finance Corporation had already written to the state government last month asking it to repay the pending loans; otherwise, they would have to declare the electric utilities as failing and unprofitable assets. This would mean that the state government would not be able to borrow loans from any other source.

REC President and CEO Sanjay Malhotra and PFC CMD’s Dr Ravinder Singh Dhillon on Wednesday met with state government officials as well as the chief minister to discuss the outstanding loan.

A statement from the CMO said they had held meetings with the Chief Minister, Chief Secretary and Secretary of Energy. Discussions focused on the Results-Linked Distribution Sector Program (RDSS), cash injection and the power sector.

Media reports, however, said the two officials had categorically told the state government that it should erase all pending loans, as this would affect the survival of the blackouts. They suggested that by implementing RDSS, discoms can overcome the losses.

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