Bihar Sixth State to Join UDAY

Bihar has joined the Centre's power distribution sector revival scheme that targets operational and financial turnaround of state discoms, starting with restructuring of their debt.
Bihar on Monday signed a memorandum of understanding with the Central government under the Ujjwal Discom Assurance Yojana (UDAY), becoming the sixth state --second with a non-BJP government after Uttar Pradesh -to do so. Other states that have become a part of the scheme are Rajasthan, Chhattisgarh, Jharkhand and Gujarat.
Under the scheme, Bihar government would take over 75%, or Rs.2,332 crore, of the state discom's debt of Rs.3,110 crore as of September 2015. The balance Rs.778 crore outstanding will be re-priced or issued as state guaranteed discom bonds at coupon rates of around 3% less than the average existing interest rate.
The debt restructuring will lead to annual saving in interest cost to the tune of around Rs.117 crore.
The scheme is expected to help Bihar speedily provide power to around 1,152 villages and 160.60 lakh households that are still without electricity .
“Availability of 24x7 power to hitherto unconnected villages households, etc.would boost the economy , promote industries, thereby improving employment opportunities and see Bihar develop into one of the leading industrialised States in India,“ an official release said.
UDAY, launched in November, 2015, seeks to ensure a permanent solution to debt-ridden discoms to achieve financial stability and improve operational efficiencies, for sustained growth.
Demand side interventions in UDAY such as usage of energy-efficient LED bulbs, agricultural pumps, fans and 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 State of Bihar. The gain is expected to be around Rs.720 crore.

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