Madhya Pradesh has joined Ujwal DISCOM Assurance Yojana (UDAY) and is expected to derive a total benefit of about Rs 17,515 crore.
The MP government along with its three distribution companies — MP Poorva Kshetra Vidhyut Vitran Nigam Ltd, MP Paschim Kshetra Vidhyut Vitran Nigam Ltd and MP Madhya Kshetra Vidhyut Vitran Nigam Ltd signed a memorandum of understanding under UDAY for operational and financial turnaround of the power sector in the state.
As part of the scheme the state government will take over loans of its three discoms. It will reduce interest costs. The amount of debt being taken over by the state is Rs 26055 crore which is about 75% of the total debt at Rs 34739 crore.
The scheme also provides for the balance debt of Rs 8684 crore to be re-priced or issued as state guaranteed DISCOM bonds, at coupon rates 3 per cent less than average existing interest rate. The state will also be supported through additional coal at notified prices, low cost power from NTPC and other CPSUs. Other benefits such as coal swapping, coal logistics rationalization, correction in coal grade slippage, availability of 100% washed coal would help the state further reduce the power costs. The state is expected to gain around Rs 4225 crore due to these coal reforms.