Telangana Solar Developers Write to Chief Minister About Piling Dues from DISCOMs

DISCOMs in the state owe power generators ₹32 billion in dues


The Telangana Solar Power Developers’ Association has urged the state Chief Minister to advise the Telangana State Power Coordination Committee and Telangana state distribution companies (DISCOMs) to clear at least six months’ payments due to solar power developers immediately.

It also demanded that the DISCOMs regularize the payments in the coming months to save the solar projects from turning into non-performing assets (NPA).

In a letter to Chief Minister K. Chandrashekar Rao, the association claimed that 3.6 GW of solar power projects, which make up for around 25% of the state’s power requirements, are operational in Telangana.

However, over ₹200 billion (~$2.72 billion) in investments from local, national, and international developers are in jeopardy, due to a 10-month delay in payments of ₹32 billion (~$436.02 million) from the DISCOMs.

Some of these projects are on the verge of turning into non-performing assets (NPAs) as developers are unable to pay lenders.

The solar developers reminded the Chief Minister that they had made several representations to the DISCOMs and the Department of Energy, but they did not yield any result.

The association said that the financial position of their projects is also affecting the business sentiment and threatening to dissuade global investors from investing in the state.

This is not the first-time solar developers in Telangana have highlighted their plight due to non-payment of dues. In July 2019, they wrote to the Ministry of New and Renewable Energy (MNRE) regarding the overdue payments from state distribution companies to solar power developers.

The issue is similar in the twin state of Andhra Pradesh. The National Solar Energy Federation of India and the Indian Wind Power Association have written to the High Court of Andhra Pradesh urging them to expedite pending hearings for issues related to the power purchase agreements and payment delays.

Distribution companies across states owed ₹122.49 billion (~$1.65 billion) to renewable energy generators (excluding disputed amounts) in overdue payments across 384 pending invoices at the end of January 2021, according to data released by the Ministry of Power.

Rahul is a staff reporter at Mercom India. Before entering the world of renewables, Rahul was head of the Gujarat bureau for The Quint. He has also worked for DNA Ahmedabad and Ahmedabad Mirror. Hailing from a banking and finance background, Rahul has also worked for JP Morgan Chase and State Bank of India. More articles from Rahul Nair.