Andhra DISCOMs Only Clearing Part of the Dues in Batches to Wind and Solar Developers

The High court had directed state distribution companies to clear all dues by January 2020


Solar and wind power developers in the state of Andhra Pradesh are beginning to receive part of their dues in batches.

Mercom spoke to several developers who confirmed that some of the developers are being paid until July, and others are getting paid for dues until September 2019.

A company spokesperson of an independent solar power producer told that developers like them are receiving payments from the state DISCOMs and that, “the matter is still under sub-judice.”

Considering the situation of the distribution companies (DISCOMs) in the state, and the fact that developers require liquidity to keep their projects running, the Andhra Pradesh High Court at Amravati in December 2019, had directed the state DISCOMs to immediately clear the dues of solar and wind developers within a month.

According to the court’s order, the DISCOMs were directed to pay ₹2.43 (~$0.0341)/kWh and ₹2.44 (~$0.0343)/kWh to wind and solar developers, respectively.

The DISCOMs then submitted an affidavit to make the payment within four weeks from December 20, 2019.

According to the affidavit, as of August 2019, the power utilities of Andhra Pradesh had a debt of ₹600 million ($8.5 million). However, after the order of the court, some of the pending bills were discharged by raising loans.

“As of today, a total of ₹3.5 billion (~$50 million) have been paid, and the balance of ₹10.9 billion (~$154.7 million) is still lying due,” the affidavit stated.

Earlier, the court had quashed the state government’s letter issued to renewable developers to reduce their quoted tariffs.

However, the two big questions that are now lurking are, when will the DISCOMs clear all the dues and what is the fate of the remaining tariff especially of those power purchase agreements (PPA) which were signed between ₹5 (~$0.07)/ kWh to ₹6 (~$0.08)/ kWh.

According to developers, the payments being made at the rate of ₹2.43 (~$0.0341)/kWh and ₹2.44 (~$0.0343)/kWh to wind and solar developers is barely enough for debt servicing.

The court is going to hear the cases to decide on the payment of the remaining part of the tariff on February 5 and 6, 2020.

According to Mercom India Solar Project Tracker, Andhra Pradesh accounts for 3.4 GW of large-scale solar projects in operations, and approximately 1.6 GW of projects are under the development pipeline. According to the MNRE, Andhra Pradesh has 4.1 GW of wind power capacity as of December 2019.


Image credit: GERC