Home India Chhattisgarh Signs MOU on ‘UDAY’; New Dawn for the State
Chhattisgarh Signs MOU on ‘UDAY’; New Dawn for the State

Chhattisgarh Signs MOU on ‘UDAY’; New Dawn for the State


The Government of India, the State of Chhattisgarh and the CSPDCL (Chhattisgarh State Power Distribution Company Limited) signed a Memorandum of Understanding (MOU) under the Scheme UDAY – “Ujwal DISCOM Assurance Yojana” today for operational and financial turnaround of the CSPDCL. Chhattisgarh would derive an overall net benefit of approximately Rs.3100 cr. through UDAY. Shri Piyush Goyal, Minister of State (IC) for Power, Coal and New & Renewable Energy witnessed the signing ceremony here today.

The Scheme UDAY was launched by the Government of India on 20th November, 2015 to ensure a sustainable solution to enable the Distribution utilities across the country to break out of a long standing debt of almost Rs.4.3 Lakh crore.

The signing of the MOU would have significant benefits for CSPDCL, with the State Govt. of Chhattisgarh taking over 75% of the outstanding debt of CSPDCL as existing on 30.09.2015 and the balance debt re-priced or issued as State guaranteed DISCOM bonds, at coupon rates around 3% less than the average existing interest rate. The DISCOM’s debt would reduce from Rs.1740 cr. to Rs.435 cr., ie. by Rs.1305 cr. CSPDCL would have annual savings of about Rs.52 cr. as annual interest cost through reduction of debt and through reduced interest rates on the balance debt.

Sustainability of operational and financial performance is at the CORE of UDAY. Through UDAY, the State of Chhattisgarh and CSPDCL would bring about operational efficiencies through compulsory feeder and Distribution Transformer metering, consumer indexing & GIS mapping of losses, upgrade/change transformers, meters etc., smart metering of high-end consumers, reduction in transmission losses and increased power supplies in areas with reduced AT&C losses. The reduction in AT&C losses and transmission losses itself is likely to bring additional revenues of around Rs.2350 cr. to CSPDCL till FY 19.

Demand Side interventions in UDAY such as usage of energy- efficient LED bulbs, fans & 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 Chhattisgarh. The gain is expected to be around Rs.630 cr. till FY 19.

The Govt. of Chhattisgarh has committed to improve the Billing efficiency from 79.27% in FY 16 to 85.28% in FY 19. Similarly, the gap between Average Cost of Supply (ACS) and Average Revenue Realization (ARR) of Rs.0.35 per unit in FY15 would also be eliminated. The Govt. of Chhattisgarh would extend a graded Operational funding requirement (OFR) support of Rs.450 cr. in FY 16 and Rs.350 cr. in FY 17, to CSPDCL, to ensure smooth cash flow, till the DISCOM achieves turnaround.

The Central government would provide incentives to the DISCOMs and the State government, aimed at improving Power infrastructure growth in the State and lowering the cost of power. The State of Chhattisgarh would get additional/priority funding through the Central schemes such as DDUGJY, IPDS, Power Sector Development Fund or such other schemes of MOP and MNRE, if they meet the operational milestones outlined in the scheme. With the financial turnaround through financial and operational efficiencies, the DISCOM rating would improve, thereby reducing their Cost of Borrowing for future capital investment requirement for sustainable operational improvements.

The people of Chhattisgarh would be the biggest beneficiaries of this MOU. Increased demand for power from DISCOM would mean higher PLF of Generating units and therefore, lesser cost per unit of electricity thereby benefitting consumers. The scheme would allow speedy availability of power to around 885 villages and 9.88 lakh households in Chhattisgarh that are still without electricity. Availability of 24*7 power to hitherto unconnected villages/households etc. would increase the economic activity and improve employment opportunities, which would reduce the influence of extremist and maoist ideologies in the State, restoring normalcy of life and further accelerate the economic growth of the State.

Signing of this MoU under UDAY will accelerate the process of reform across the entire power sector and will ensure 24*7 Power For All at affordable rate. In true sense, the scheme would also herald the UDAY (rise) of a ‘Powerful India’.


Anand Gupta Editor - EQ Int'l Media Network


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