In a hurry to beat the poll announcement deadline, the government on Thursday cleared four power projects worth Rs 31,560 crore with a generation capacity of 3,760MW. It also approved the hydro power policy as well as some measures to revive stressed assets.

“The government has approved investment for four power projects and two policies on hydro power and stressed power assets,” Union power minister R. K. Singh told reporters after the cabinet meeting.

Singh said two recommendations of a high-level committee (HLC) on payment security mechanism for private power producers and gas-based stressed assets were not approved by the Union cabinet, saying a lot of ground needs to be covered to implement them.

Talks are going on with the RBI as well as the oil ministry on both the issues, Singh added.

The committee had suggested bills of discoms towards generators can be discounted by the financial institution. This comes at a time discoms have not been making timely payments to generation firms. As of January 31, discoms owe Rs 36,134 crore to generation companies.

The cabinet committee has, however, approved the recommendations of the group of ministers based on the suggestion of a high-level committee. The recommendations include grant of linkage coal for short-term power purchase agreements (PPAs), allowing existing coal linkage to be used in the case of termination of PPAs due to payment default by discoms and procurement of bulk power by a nodal agency against pre-declared linkages.

The GoM has also recommended that central/state generating companies may act as an aggregator of power, increase in the quantity of coal for special forward e-auction for the power sector, coal linkage auctions to be held at regular intervals.

Besides, it recommended non-lapsing of short supplies of coal and ACQ (annual contract quantity) to be determined based on efficiency.

Hydel push

The government has approved a slew of measures under the hydro policy, including providing renewable energy status for large hydel projects and new funding provisions. Earlier, hydro projects up to 25MW capacity were considered as renewables and were eligible for various incentives such as financial assistance and cheaper credit.

With the government’s decision, hydropower projects of above 25MW can also get the benefits.