The Power Ministry will seek financial support of Rs 1,200 crore from the Ministry of Finance, for 2013-14, towards restructuring the debt of the state power distribution companies.

“A budgetary support of Rs 1,200 crore has been asked for (in the budget) for the financial restructuring package of the discoms,” a source close to the development told PTI.

The Power Minister Jyotiraditya Scindia is meeting the state energy ministers on February 5, next month, to bring them on board with the Centre’s financial restructuring package plan to bailout the discoms.

The government, in September last year, approved restructuring of Rs 1.9 lakh crore (till March 2011) debt of State Electricity Boards.

Under the scheme, 50 per cent of the short-term outstanding liabilities would be taken over by the state governments. Balance 50 per cent loans would be restructured by providing moratorium on principle and best possible terms for repayments.

As part of mandatory condition, 50 per cent of the outstanding liabilities up to March 31, 2012 are to be taken over by the state governments, which will be first converted into bonds to be issued by discoms to the participating lenders, duly backed by the state government’s guarantee.

The Power Ministry has now extended the last date for the states to apply for restructuring the loans of their respective electricity boards to March 31, 2013. The earlier date was December 31, 2012.

“Yes, it (last date) has been extended,” a Power Ministry official confirmed.

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