Punjab on Friday joined the Centre’s discom revival plan known as Ujwal Discom Assurance Yojana (UDAY), making it the seventh state to embrace it. The UDAY scheme will reduce the interest costs of the state discoms by Rs 625 crore annually.
As per the tripartite agreement between the central government, the state and the respective power distribution utilities, Punjab would take over three-quarter of the discoms’ debt, amounting to R15, 628 crore. The state-owned discoms have an outstanding debt of R20,838 crore as on September 30, 2015. The scheme also provides for the balance debt of R5,210 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 Punjab, nearly 37% , or R1.6 lakh crore, of the total outstanding discom debt (R 4.3 lakh crore) would be restructured,” the government said.
The agreement was singed in the presence of Union power minister Piyush Goyal and Punjab deputy chief minister Sukhbir Singh Badal. Badal said, “Punjab will benefit a lot from UDAY scheme. The state will save over R5,000 crore. Our electricity department will save R600 crore.”
While nearly 20 states that have given in-principle approval for UDAY, Rajasthan, UP, Chhattisgarh, Jharkhand Bihar and Gujarat have signed up for the scheme so far.