New Delhi, April 2 (IANS) Mizoram has become the 27th state to join the central government’s Ujwal Discom Assurance Yojana (Uday) debt restructuring scheme for states’ electricity distribution companies (discoms), an official statement said on Sunday.
“The government of India and the state of Mizoram signed a Memorandum of Understanding (MOU) under the Uday scheme on March 31, 2017, for operational improvement of the state’s Power Distribution Department,” a Union Power Ministry statement said here.
Under Uday, a state government agrees to take over 75 per cent debt of its distribution company. The scheme provides for the balance debt to be re-priced or issued as state guaranteed discom bonds at coupon rates around 3-4 per cent less than the average existing interest rate.
Mizoram would get an overall net benefit of around Rs 198 crore by way of cheaper funds, reduction in aggregate technical and commercial (AT&C) and transmission losses and interventions in energy efficiency during the period of turnaround, the statement said.
The reduction in AT&C losses to 15 per cent and transmission losses to 2.5 per cent is likely to fetch additional revenue of around Rs 166 crore to the state, it added.
“Demand side interventions in Uday such as usage of energy-efficient LED bulbs, agricultural pumps, fans and air-conditioners and efficient industrial equipment would help in reducing peak load, flatten load curve and thus help in reducing energy consumption in the state.”
“The gain is expected to be around Rs 30 crore,” it said.
“The central government would also provide incentives to the state government for improving power infrastructure in the state and for further lowering the cost of power,” it added.
According to the Centre, the scheme would also allow speedy availability of cheaper power to 22,007 households in the state that are still without electricity.