Bhubaneswar: In a major relief to Gridco, the state Cabinet on Thursday approved a proposal to provide the government guarantee of Rs 2,600 crore to the power utility to avail bank loans during 2020-21 financial year.
The government guarantee will enable GRIDCO to get about 2 per cent interest concession from banks.
Chief Secretary Asit Tripathy said the Cabinet decision on GRIDCO will reduce the electricity supplier’s financial cost and in turn the retail tariff for industries, MSMEs and general consumers will be lower.
The revenue of Gridco, which has been supplying power to four distribution companies in the state at the bulk supply price determined by OERC, has not been adequate to meet the power purchase cost. If Gridco fails to pay its dues to power generators such as NTPC in time, the latter will cut down the supply which will eventually lead to load shedding.
In order to prevent such situation and ensure uninterrupted power supply to the consumers, the government extended its guarantee to Gridco to avail bank loans, according to a government release.