- Launch date: 05th November 2015
- Launch by: Prime Minister Shri Narendra Modi
Objective of this Scheme:
- For financial turnaround of Power Distribution Companies.
- This scheme empowers DISCOMs with the opportunity to break even in the next 2-3 years through four initiatives.
- Improving operational efficiencies of DISCOMs.
- Reduction of cost of power.
- Reduction in interest cost of DISCOMs.
- Enforcing financial discipline on DISCOMs through alignment with State finances.
- Through some measures, reduction in cost of power would be achieved such as:
- Increased supply of cheaper domestic coal,
- Coal linkage rationalization,
- Liberal coal swaps from inefficient to efficient plants,
- Coal price rationalization based on GCV (Gross Calorific Value),
- Supply of washed and crushed coal,
- Faster completion of transmission lines.
- States will take over three-fourths of the debt of their respective discoms, Under the scheme.
- Remaining 25 per cent of the discom debt will be dealt by –
- Conversion into lower interest rate loans by the lending banks.
- Or be funded by money raised through discom bonds backed by State guarantee.
- Backing from the State will help bring down the interest rate for the discoms.
- For the bailout, in return, the discoms have been given target dates (2017 to 2019) by which they will have -
- To meet efficiency parameters such as reduction in power lost through transmission, theft and faulty metering, installing smart meters and implementing GIS (geographic information system) mapping of loss making areas.
- States will also have to ensure that power tariffs are revised regularly.
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