Tamil Nadu becomes the 21st state to join UDAY

Union Minister of State (IC) for Power, Coal, New & Renewable Energy and Mines, Piyush Goyal presided over the signing of the Memorandum of Understanding (MOU) under the Ujwal DISCOM Assurance Yojana (UDAY) Scheme with the Government of Tamil Nadu and its Discom TANGEDCO, for operational and financial turnaround of the DISCOM, recently in New Delhi.

The signing ceremony was held in presence of the P. Thangamani, Minister for Electricity, Prohibition & Excise, Government of Tamil Nadu.

Tamil Nadu would derive an overall net benefit of approximately Rs 11,000 crore through UDAY, by way of savings in interest cost, reduction in AT&C and transmission losses, interventions in energy efficiency, coal reforms etc. The state also signed 24X7 Power for All document on the occasion. With Tamil Nadu joining the cause, 92% of country???s Discom debt has been covered under UDAY.

By signing the MOU under UDAY, the State Government is taking over 75% of the debt of Rs 30,420 crores of TANGEDCO. The scheme also provides for the balance debt to be re-priced or issued as state guaranteed Discom bonds, at coupon rates around 3-4% less than the average existing interest rate. The State would have savings of about Rs950 Crore in annual interest cost through reduction of debt and through reduced interest rates on the balance debt.

The ultimate benefit of signing the MOU would go to the people of Tamil Nadu. Higher demand for power from DISCOMs would mean higher Plant Load Factor (PLF) of generating units and therefore, lesser cost per unit of electricity thereby benefitting consumers. Availability of 24??7 powers for all would increase the economic activity and improve employment opportunities in the State.

Source : urbannewsdigest