Madhya Pradesh joins “UDAY” scheme; would derive an overall net benefit of Rs 17,515 crore through “UDAY”

The Government of India, the State of Madhya Pradesh and the DISCOMs of Madhya Pradesh (MP Poorva Kshetra Vidhyut Vitran Nigam Ltd., MP Paschim Kshetra Vidhyut Vitran Nigam Ltd. and MP Madhya Kshetra Vidhyut Vitran Nigam Ltd.) signed Memorandum of Understanding (MOU) under the Scheme UDAY – “Ujwal DISCOM Assurance Yojana” today for operational and financial turnaround of the DISCOMs. The signing ceremony was held in the august presence of the Minister of State ( IC) for Power, Coal & New and Renewable Energy  & Mines Shri Piyush Goyal here today.

Besides the State of MP, Union Territory of Puducherry has also signed MoU under UDAY today. With these two State/UT joining the Scheme, the number of States/UT that have joined UDAY goes up to 16. The combined DISCOM debt (including CPSU dues) that would be restructured in respect of these states is around Rs.2.51 lac crore as on 30th September, 2015.

Today the Government of Madhya Pradesh has taken a positive step towards supporting its DISCOMs by signing the MOU under UDAY and agreeing to take over the debt of the DISCOMs gradually. The Government of Madhya Pradesh would be taking over its own loan to DISCOMs and enable the DISCOMs to reduce interest cost, as part of the Scheme. The amount of debt being taken over by the State is Rs.26055 cr., being 75% of the total DISCOM debt of Rs.34739 cr. outstanding as on 30.09.2015, as envisaged in the scheme. The scheme also provides for the balance debt of Rs.8684 cr. to be re-priced or issued as State guaranteed DISCOM bonds, at coupon rates around 3% less than the average existing interest rate. The annual saving in the interest cost to the DISCOMs would be around Rs.2215 crore on account of restructuring of the DISCOM debt.

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