The central government on Monday announced that Bihar has entered into an agreement to become a part of the discom revival plan known as Ujwal DISCOM Assurance Yojana (UDAY), making it the sixth state to embrace it. The UDAY scheme will reduce the interest costs of Bihar discoms by Rs 117 crore annually.
As per the trapartite agreement between the central government, the state and the respective power distribution utilities, Bihar would take over three-quarter of the discoms’ debt, amounting to Rs 2332 crore. The state-owned discoms had an outstanding debt of Rs 3,110 crore as on September 30, 2015. The scheme also provides for the balance debt of Rs 778 crore to be re-priced or issued as state guaranteed discom bonds, at coupon rates around 3% less than the average existing interest rate.
“With the signing of an MoU with Bihar, about 33% of the discoms’ debt, ie. around Rs 1.40 lakh crore, would be restructured,” the government said. It added that even a state like Gujarat with profit-making distribution utilities has come on board the scheme for operational turnaround.
While nearly 20 states have given in-principal approval for UDAY, Rajasthan, UP, Chhattisgarh, Jharkhand and Bihar have officially signed up for the scheme so far.