Context:
The Union Minister for Power and New & Renewable Energy has informed about the status of repayment of the bonds issued by the State Governments and the DISCOMs under the UDAY scheme.
About UDAY SCHEME:
- The Ujwal Discom Assurance Yojana (UDAY) was launched by the Ministry of Power in November 2015.
- Aim: To improve the financial health and operational efficiency of state-owned distribution companies (discoms) across the country.
- State Issuance of non-SLR Bonds: State will issue non-SLR (Statutory Liquidity Ratio) including SDL (State Development Loans) bonds in the market or directly to the respective bank/ financial Institution holding the DISCOM debts to the appropriate extent.
- Transfer of Proceeds to DISCOMs: The funds realized from the bond issuance will be entirely transferred by the state to the respective DISCOMs.
- Financial turnaround
- Operational improvement
- Reduction of cost of generation of power
- Development of Renewable Energy
- Energy efficiency & conservation
- Reduction in Cost of power through Central Support
- Increased supply of domestic coal
- Allocation of coal linkages at notified prices
- Coal price rationalization
- Coal linkage rationalization & allowing coal swaps
- Supply of washed & crushed coal
- Additional coal at notified prices
- Faster completion of Interstate Transmission lines
- Power purchase through transparent competitive bidding
- Additional priority funding under schemes like Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY), Integrated Power Development Scheme (IPDS), etc.
- Deb Takeover:
- States to take over 75% of the outstanding debt of their discoms (accumulated till 2015) over two years (50% in 2015-16 and 25% in 2016-17).
- Progressive Funding of DISCOM Losses:
- They were also required to progressively fund a greater share in losses of discoms from their budgetary resources (10% in 2018-19, 25% in 2019-20, and 50% in 2020-21).
- Operational Targets:
- In addition, UDAY specified certain operational targets such as achieving 15% AT&C losses by 2018-19 at the national level.
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