The Karnataka government is considering a permanent guarantee for loans taken by escoms

The Karnataka government is considering offering guarantees from financial institutions for loans to electricity supply companies (escoms).

Energy Minister KJ George recently revealed that the department has requested the government to give this guarantee in the assembly meeting. If Eskom needs money, we have requested the government to submit their financial details, subsidy details, profit and loss, requested subsidy and revenue details to the government and get a guarantee. When taking a loan from a bank/financial institution,’ he said.

He added, ‘The government has taken our request positively and is taking necessary action. The minister was replying to a question raised by BJP state president BY Vijayendra on the financial health of five Eskom and other supply companies in the state.

As on March 31, 2024, Bescom’s ₹ 8360.08 crore, Chamundeswari Electricity Supply Corporation’s ₹ 2,634.30 crore, Mescom’s ₹ 1,414.50 crore, Hescom’s ₹ 5,434.08 crore, Gescom’s ₹ 1,434.19 crore, ₹ 1,100,000 crore. 60 crore was Rs.

In the last financial year, after all Eskoms except Mescom suffered losses, the Electricity Authority had to take a loan of 1000 crores from financial institutions. As of March 31, 2024, Bescom’s total debt was ₹ 18,095.82 crore, CESC’s ₹ 4,348.54 crore, Mescom’s ₹ 1,623.30 crore, Hescom’s ₹ 10,332.40 crore and Gescom’s ₹ 4,624.49 crore.

“These numbers indicate that the Eskoms are in bad shape financially. No matter how much money is pumped in by the government, they are a bottomless pit. The companies are doomed, and the only solution is to merge all five into a holding company headed by a competent executive,” Karnataka said. A former advisory member of the Electricity Regulatory Commission (KERC) said.

However, the minister denied any allegations about the financial crisis among the Eskoms. He said, “Eskoms receive timely tariff revisions from KERC every year. Our Eskoms have also achieved good performance indicators at national level. The government has been subsidizing electricity supply companies every month for the electricity provided free of cost under the IP set and Griha Jyoti Yojana. Hence, there is no financial crisis in Eskom. ”

He also said that Karnataka Power Corporation Limited (KPCL) has earned profits for five consecutive years, proving its financial health. KPCL also owes ₹ 9,942 crore from escoms (excluding late payment surcharge) till December 5, 2024.