Bengaluru The Karnataka government has taken a significant step to address the outstanding power bills owed by pastoral original bodies, including gram panchayats, by securing a loan from the casing and Urban Development Corporation( HUDCO). The loan, amounting to ₹ 5,257.70 crore, will be used to clear pretenses accumulated from April 1, 2015, to March 31, 2023.
The total outstanding quantum is obliged to the Karnataka Power Corporation Limited( KPCL), Karnataka Power Transmission Corporation Limited( KPTCL), and colorful electricity force companies( ESCOMs). The pretenses have accumulated for services including drinking water force and the installation of road lights across pastoral areas.
According to a note issued by the finance department on March 25, the state government ordered the energy department on March 30 to secure a loan to settle these pretenses . The government guaranteed the loan, icing its security The Finance Department agreed to match the loan quantum from the periodic entitlement handed to gram panchayats or from the Guarantee Release Fund established for similar requirements.
The Power Company of Karnataka Limited( PCKL) was appointed as the nodal agency to grease this loan from banks or fiscal institutions. Following a shot process, the government permitted PCKL to secure a long- term loan from HUDCO. After completing all procedures, HUDCO issued the loan permission letter on May 28 and deposited the finances into PCKL’s account on June 19.
The loan will be used to repay the old debts of the electricity force companies as per the outstanding quantities submitted by these companies to the government. Energy Minister K.J. George approved this offer on June 21, stipulating that a report on the fund operation be submitted to the government.
Three fiscal institutions shared in the bidding process UCO Bank, HUDCO, and pastoral Electrification Corporation( REC). UCO Bank offered a loan of ₹ 500 crore at an interest rate of8.85 per annum, HUDCO at8.99 for the entire quantum, and REC at9.15. Both UCO and HUDCO waived colorful freights associated with the loan.
Accommodations led by the fresh Chief Secretary of the Energy Department redounded in HUDCO agreeing to a reduced interest rate of 8.75. Accordingly, the loan was secured from HUDCO under the following conditions.
Interest rate8.75 per annum Yearly interest payments and daily top payments Loan prepayment period 10 times ( including a 2- time doldrums and an 8- time prepayment period) Loan security Guaranteed by the state government This loan will be critical in addressing the fiscal backlog faced by pastoral original bodies in Karnataka, icing the durability of essential services. still, the effective application and timely prepayment of the loan will be pivotal for maintaining financial stability.
