Madhya Pradesh and the Union Territory of Puducherry have signed the memorandum of understanding with the Ministry of Power to join the Ujwal Discom Assurance Yojana.For operational and financial turnaround of the DISCOMs. 

With these two MoUs being signed, the total number of states and union territories who are a part of UDAY has risen to 16, the Power Ministry said in a statement. The combined debt of the electricity distribution utilities which will be restructured stands at Rs 2.51 lakh crore as on September 30, 2015.

Madhya pradesh  figures

The Government of Madhya Pradesh has taken a positive step towards supporting its DISCOMs by signing the MOU under UDAY and agreeing to take over the debt of the DISCOMs gradually. The state  Government would be taking over its own loan to DISCOMs and enable the DISCOMs to reduce interest cost, as part of the Scheme.

• The amount of debt being taken over by the State is Rs.26055 cr., being 75% of the total DISCOM debt of Rs.34739 cr. outstanding as on 30.09.2015, as envisaged in the scheme.

• The scheme also provides for the balance debt of Rs.8684 cr. to be re-priced or issued as State guaranteed DISCOM bonds, at coupon rates around 3% less than the average existing interest rate. The annual saving in the interest cost to the DISCOMs would be around Rs.2215 crore on account of restructuring of the DISCOM debt.

• The scheme would allow speedy availability of cheaper power to around 131 villages and 52.86 lakh households in Madhya Pradesh that are still without electricity.

• An overall net benefit of approximately Rs.17515 crore would accrue to the State by opting to participate in UDAY, by way of savings in interest cost, reduction in AT&C losses, interventions in energy efficiency, coal reforms etc. during the period of turnaround.

Puducherry figures

Puducherry has joined the Ujwal DISCOM Assurance Yojana (UDAY), and will be the first Union Territory to sign an MoU under the scheme. An overall net benefit of around Rs 378 crore would accrue to the UT by opting to participate in UDAY, by way of cheaper funds, reduction in AT&C and transmission losses, and interventions in energy efficiency, during the period of turnaround.

• The gain is expected to be around Rs.72 crore. Further, with improved efficiency, the Electricity Department would be in a better position to borrow funds at cheaper rates for Power infrastructure development/improvement in the UT.