Lakshadweep Joins “UDAY” Scheme

 

POWER SECTOR

Lakshadweep Joins “UDAY” Scheme

Energetica India

The Government of India and the Union Territory of Lakshadweep have signed a Memorandum of Understanding (MoU) under the Scheme Ujwal DISCOM Assurance Yojana (UDAY) for operational turnaround of the union territory’s electricity department. The MoU paves way for improving operational efficiency of the electricity department of the Union Territory (UT).

The Government of India and the Union Territory (UT) of Lakshadweep have signed a Memorandum of Understanding (MoU) under the Scheme Ujwal DISCOM Assurance Yojana (UDAY) for operational turnaround of the union territory’s electricity department. An overall net benefit of approximately Rs. 8 crore would accrue to Lakshadweep by participating in UDAY, by way of cheaper funds, reduction in AT&C losses, interventions in energy efficiency, etc. during the period of turnaround and will continue in future years.

The MoU paves way for improving operational efficiency of the electricity department of the UT. Through compulsory distribution transformer metering, consumer indexing & GIS mapping of losses, upgrade/change transformers, smart metering of high-end consumers, feeder audit etc., AT&C losses and transmission losses would be brought down, besides eliminating the gap between cost of supply of power and realisation. The reduction in AT&C losses to 10.00 per cent is likely to bring additional revenue of around Rs. 3 crore during the period of turnaround.

Demand side interventions in UDAY such as usage of energy-efficient LED bulbs, agricultural pumps, fans & air-conditioners and efficient industrial equipment through PAT (Perform, Achieve, Trade) would help in reducing peak load, flatten load curve and thus help in reducing energy consumption in the Union Territory of Lakshadweep. The gain is expected to be around Rs. 3 crore.

While efforts will be made by the electricity department to improve their operational efficiency, and thereby reduce the cost of supply of power, the Central Government would handhold the UT administration for improving power infrastructure and for further lowering the cost of power. The Central schemes such as DeenDayalUpadhyaya Gram Jyoti Yojana (DDUGJY), Integrated Power Development Scheme (IPDS), Power Sector Development Fund or such other schemes of the Ministry of Power and the Ministry of New and Renewable Energy (MNRE) are already providing funds for improving power infrastructure in the UT and additional/priority funding would be considered under these schemes, if the UT meets the operational milestones outlined in the scheme.

UDAY

Ujwal DISCOM Assurance Yojana (UDAY) is the financial turnaround and revival package for electricity distribution companies of India (DISCOMs) initiated by the Government of India with the intent to find a permanent solution to the financial mess that the power distribution is in. It allows state governments, which own the DISCOMs, to take over 75 percent of their debt and pay back lenders by selling bonds. DISCOMs are expected to issue bonds for the remaining 25 percent of their debt.

States will issue non-SLR including SDL bonds in the market or directly to the respective banks / Financial Institutions (Fls) holding the DISCOM debt to the appropriate extent. Proceeds realised from issue of the bonds to the banks / Fls shall be entirely transferred by the State to DISCOMs, which in turn shall discharge the corresponding amount of Banks / Fls debt.Non-SLR bonds issued by the State will have a maturity period of 10-15 years with a moratorium on repayment of principal upto 5 years, as required by the State.

  • The 10 year State bonds issued will be priced at 10 year G-Sec plus 0.5% spread for 10 year State bonds plus 0.25% spread for non-SLR status on semi­annual compounding basis, or market determined rate, whichever is lower. This may be further reduced if interest is paid on monthly basis
  • Banks / Fls shall not levy any prepayment charge on the DISCOM debt.
  • Banks / Fls shall waive off any unpaid overdue interest and penal interest on the DISCOM debt and refund / adjust any such overdue / penal interest paid since 1st October 2013.
  • For amount transferred as loan, the interest rate payable by the DISCOMs to the State for the intervening period shall not exceed the rate of interest on the bonds issued by the State.

Source: “Ministry of Power,” Government of India.

| Article published on 15/05/2018 by Rashmi Nargundkar

 
 
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