Chandigarh, June 27 - Haryana Cabinet which met under the Chairmanship of Chief Minister, Sh. Manohar Lal here today accorded Ex-post Facto approval to a proposal for providing State Government Guarantee of Rs. 700 crore in favour of Central Bank of India, Sector-10, Panchkula against the sanctioned loan to Uttar Haryana Bijli Vitran Nigam Ltd. (UHBVNL) for meeting the Capital expenditure and power purchase payments.

The Nigam manages its day-to-day operations by using fund-based and non-fund-based working capital limits sanctioned by various banks. Due to the increase in power purchase payments, to meet the capital expenditure requirement and providing of Letter of Credit in favour of power suppliers as per Ministry of Power guidelines, UHBVNL requires fresh working capital loans and Capex loans.

To meet the fund-based requirement, UHBVNL had requested various banks to sanction the Capex loan of Rs. 500 crore and a working capital loan of Rs. 200 crore. The Central Bank of India, Sector-10, Panchkula has considered the Nigams request and sanctioned a Capex Loan of Rs. 500 crore.

With working capital loan, UHBVNL will be able to discharge the power purchase liabilities in time and with a Capex loan, UHBVNL will incur the capital expenditure without any financial hardship. As per the sanction letter of the bank, UHBVNL has to provide the State Government Guarantee for their borrowings. Capital loan taken as on March 31, 2022 is Rs. 1988 crore.