New Delhi, Dec 22 (IANS): The Centre's 'Atmanirbhar' package, along with Coal India's credit move, may improve liquidity of private sector coal-based power generators (gencos) by up to Rs 40,000 crore this year, Crisil Ratings said in a report on Tuesday.

The report cited liquidation of overdue receivables from state power distribution companies (discoms) due to the 'Atmanirbhar Bharat' package and Coal India Ltd allowing thermal power plants to avail credit period for purchasing coal as factors that might improve liquidity of private sector coal-based power generators.

The central government announced a Rs 1.2 lakh crore loan scheme under 'Atmanirbhar Bharat' package to enable discoms to pay for outstanding dues to gencos.

The scheme required the first tranche, accounting for half of the total package, to be disbursed immediately and the balance upon discoms committing to operational improvements.

The scheme was much needed, with state discoms delaying payment to gencos due to their weak financial position, the Crisil Ratings report said.

As per the report, weakening of cash flows during Covid-19-led lockdowns this year further stretched the cash flows of discoms.

This has ratcheted up overdues to private gencos to Rs 59,000 crore as of October this year, the report said.

"To reduce the overdues, discoms have already begun signing into this scheme under the Atmanirbhar Bharat package. As of end-November, nearly half of the first tranche has been disbursed. Given the policy thrust, we expect full disbursement by the end of this fiscal,"said Nitesh Jain, Director, Crisil Ratings.

"Private coal-based power plants should see a liquidity relief of about Rs 30,000 crore given that half of the overdues are owed to them."

In addition, gencos received relief from their principal coal supplier - Coal India Ltd - which caters to 80 per cent of their coal requirements.

"Coal purchases form nearly three-fourths of gencos' operational costs. As against cash advances for these coal purchases, Coal India has begun allowing letter of credit facility of 90-180 days," the report said.