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Bihar Signs Pact For Joining UDAY Scheme



Bihar has become the sixth state to join the central government’s financial revival scheme for electricity distribution utilities which will give the state a benefit of ₹ 9,000 crore over the next three years.

The State Government and the distribution utilities of Bihar – North Bihar Power Distribution Company Ltd and South Bihar Power Distribution Company Ltd – signed the memorandum of understanding with the Ministry of Power on Monday.

Under the Ujwal DISCOM Assurance Yojana (UDAY), savings in interest cost, reduction in AT & C and transmission losses, coal reforms and other initiatives will help give the state ₹ 9,000 crore.

Out of the total debt of ₹ 3,110 crore with the state’s electricity distribution utilities, Bihar Government will take over ₹ 2,332 crore of the debt and the remaining will be issued as state guaranteed discom bonds. This would give annual interest cost savings of ₹ 117 crore.

The biggest chunk of financial benefit will come from reduction in AT & C losses and transmission losses of around ₹ 6,650 crore.

Coal reforms in the state which include swapping of coal linkages, correction in coal grade slippage and 100 per cent washed coal supply will help the state reduce the cost of power and provide ₹ 1,086 crore of financial benefits, an official statement said.

“We remain committed to all the projects that were announced as part of the Bihar package, including ₹ 5,800 crore for Deen Dayal Upadhyay Gram Jyoti Yojana and ₹ 2,900 crore for the Integrate Power Development Scheme. For the UMPP at Banka, a mine has also been allotted,” said Piyush Goyal, Minister of State (Independent Charge) of Power, Coal and New & Renewable Energy.

Apart from Bihar, Rajasthan, Uttar Pradesh, Chhattisgarh, Jharkhand and Gujarat have also signed the MoU for UDAY which covers ₹ 1.4 lakh crore or 33 per cent of the total DISCOMs debt in the country. Gujarat has signed the MoU for operational turnaround as its DISCOMs are in a relatively healthy financial position, an official statement said.

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