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Punjab has become the seventh state to sign the agreement for joining the central government’s financial revival package for state electricity distribution utilities.
The move will help Punjab’s electricity sector save ₹ 5,475 crore over the next three years, said Piyush Goyal, Minister of State (Independent Charge) for Power, Coal and New & Renewable Energy.
“Punjab’s electricity distribution utilities have a debt of about ₹ 20,000 crore. Of this, the state government will take over ₹ 15,000 crore of debt. This will enable annual interest cost savings alone of ₹ 625 crore,” Goyal said.
Under the Ujwal DISCOM Assurance Yojana (UDAY) scheme, the state government take over 75 per cent of the electricity distribution utilities' debt and refinance it through bonds. The remaining 25 per cent of the debt of distribution utilities are refinanced through state-government backed DISCOM bonds.
So far, seven states, including Punjab, have signed the agreement for joining the UDAY scheme which covers 40 per cent of the total outstanding debt of distribution utilities in the country.
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