Transforming India's Power Sector Through UDAY Initiative
Ministry of Power's UDAY (Ujwal DISCOM Assurance Yojana) aims to revitalize state-owned Power Distribution Utilities, addressing financial stress and enhancing operational efficiency. Through financial interventions and collaborative governance, UDAY strives to reduce losses, improve revenue collection, and make all DISCOMs profitable by FY 19 or FY 20.
- Power Sector Revitalization
- UDAY Initiative
- Financial Interventions
- Collaborative Governance
- Operational Efficiency
Download Presentation
Please find below an Image/Link to download the presentation.
The content on the website is provided AS IS for your information and personal use only. It may not be sold, licensed, or shared on other websites without obtaining consent from the author. Download presentation by click this link. If you encounter any issues during the download, it is possible that the publisher has removed the file from their server.
E N D
Presentation Transcript
Ministry of Power UDAY Ujwal DISCOM Assurance Yojana Indo-Japan joint Seminar on Smart Meters/Smart Grids Hotel Ashoka, New Delhi 17thAugust, 2016 1
UDAY explained UDAY in Hindi means Rise ; often associated with A rising sun A scheme for operational and financial turnaround of State owned Power Distribution Utilities (DISCOMs) An example of Cooperative federalism and collaborative Governance 2
Stress in Power and banking Sector Adverse effect on Industry Unhappy Consumers Poor Quality and reliability of Power supply DISCOM Losses High Cost of Power High Interest Costs Poor Revenue collection High Line (AT&C) Losses Adverse Creditworthiness 3
Interest costs - a debt trap DISCOM debt interest rate Average ~ 12%, as high as 14-15% for many DISCOMs while States borrow at ~ 8% Regulators don t allow pass through of interest on past losses in tariff Estimates suggest Interest costs are 80% of Annual losses 5
UDAY, a sustainable solution of DISCOM problems UDAY, a sustainable solution of DISCOM problems Future Present Past Improve Operational Efficiency Fiscal State take over of debt Lower Cost of Power Discipline on future debt Enabling provision of Quarterly Tariff Increase State Liability in continued losses Reduction in Interest Cost 6
Expected Outcomes Reduction of AT&C loss to 15% in FY 19 Reduction in revenue gap to zero by FY 19 All DISCOMs to be profitable by FY 19 or FY 20 7
Financial interventions DISCOMs debt made a de jure borrowing of States States to take over 75% of DISCOM debt as on 30.11.2015 by FY 17 through market borrowing at lower rates Balance 25% of DISCOM debt to be issued as repriced loans or Bonds by DISCOMs at lower rates Due debts to be retired first followed by higher cost debts. Flexibility to states to spread the grant to DISCOMs over 3 to 5 years as a mix of Equity, Loan or Grant. 8
Ongoing DISCOM financing Loss financing only as per loss trajectory finalized with MoP and only through DISCOM bonds backed by State guarantee Working capital will only be allowed up to 25% of the DISCOM s previous year s annual revenue States to take over future losses, if any, as per defined trajectory 9
Operational improvements Consumer Indexing and GIS mapping Feeder and DT metering Feeder segregation Demand Side management: LED lamps, Agricultural pumpsets, PAT scheme Smart metering Anti-theft campaigns 10
Reduction in cost of Power Support efficient plants for Power production Reduction in coal transportation; lower costs Measures for faster completion of Transmission lines Coal price rationalization, Higher supply, etc 11
Strong Monitoring Framework Division level targets of loss reduction with responsibilities, resources and timelines Details of operational activities Tripartite MoUs Monthly Reviews 12
Present Status and early trends 15 States and 1 Union Territory joined already Debts worth Rs USD 37 Billion addressed; Borrowings worth USD 25 Billion done. Early trends encouraging USD 330 million saved in interest costs in Q1 FY17 over Q1 FY16 Cost of Power generation down 10% in Q1 FY 17 over Q1 FY 16 Savings of USD 136 million to participating States Increase in energy Generation and Energy availability by 10% in Q1 FY 17 over Q1 FY 16 Reduction in losses and revenue gaps 13
Thanks 14
