Bihar is the sixth state to join Uday discom for debt restructuring

The annual saving in the interest cost to the state would be around Rs.117 crore (17 million US$)on account of restructuring of the discoms debt.

Author

February 23, 2016

Bihar signed the tripartite agreement with the union power ministry and the state distribution company (discom) for debt restructuring.

[dropcap color=”#008040″ boxed=”yes” boxed_radius=”8px” class=”” id=””]B[/dropcap]ihar became the sixth state on Monday to join the Ujwal Discom Assurance Yojana (Uday) discoms’ debt restructuring scheme. Bihar signed the tripartite agreement with the union power ministry and the state distribution company (discom).

Of the total discom debt in this case of Rs.3,110 crore (453 million US$), the state government would take over 75 percent. As per the Uday scheme, the balance debt would be re-priced or issued as government guaranteed discom bonds at coupon rates of around 3 percent, or less, than the average current interest rate.

Power Minister Piyush Goyal said at the signing ceremony that, “The annual saving in the interest cost to the state would be around Rs.117 crore (17 million US$)on account of restructuring of the discoms debt.”

“The reduction in AT & C losses and transmission losses to 15 percent and 4 percent, respectively, is likely to bring additional revenue of around Rs.6,650 crore (968.8 million US$) during the period of turnaround,” he said.

[dropcap color=”#008040″ boxed=”yes” boxed_radius=”8px” class=”” id=””]”W[/dropcap]e remain committed to all the projects that were announced as part of the Bihar package, including Rs.5,800 crore (845 miliion US$)for Deen Dayal Upadhyay Gram Jyoti Yojana and Rs.2,900 crore(422.5 million US$) for the Integrate Power Development Scheme. For the UMPP (ultra-mega power project) at Banka, a mine has also been allotted,” he added.

Savings in interest costs, reduction in AT & C and transmission losses, coal reforms and other initiatives will help bring Bihar Rs.9,000 crore(1311 million US$).

Apart from Bihar, Rajasthan, Uttar Pradesh, Chhattisgarh, Jharkhand and Gujarat have also signed agreements for Uday, which covers Rs.1.4 lakh crore(20396 million US$), or 33 percent of the total discom debt in the country.