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First MOU on “UDAY” signed b/w GOI, Jharkhand & JBVNL

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Government of India, Jharkhand and the JBVNL (Jharkhand Bijli Vitran Nigam Limited) signed a Memorandum of Understanding (MOU) for operational & financial turnaround of Discoms under the Scheme UDAY – Ujjwal Discom Assurance Yojana.
(Jharkhand CM – Raghubar Das)

  • Inking of this MoU indicates the onset of major Distribution reforms in the country under UDAY.

First MOU on “UDAY” signed bw GOI, Jharkhand & JBVNLKey features of MoU

  • The MoU will help in electrifying remaining 2200 villages in state.
  • Jharkhand government is planning to provide off-grid power in 434 villages due to their geographical barriers.
  • Jharkhand has committed to improve the Billing efficiency from 73% in FY 16 to 85% in FY 19 and Collection efficiencies from 89% in FY 16 to 100% in FY 19.
  • The gap between Average cost of supply (ACS) and Average revenue realization (ARR) would be reduced from Rs 3.55 per unit in FY15 to zero by the FY19.
  • Jharkhand and the JBVNL would adhere to reduce the AT&C losses from the current levels of 40% to 15% by the year 2018-19.

Benefits for the JBVNL

  • Jharkhand has taking over 100% liabilities of outstanding dues with CPSUs and 75% of the outstanding debts of JBVNL as existing on 30.09.2015.
  • As a special dispensation, the JBVNL would also be able to wipe out its outstanding dues amounting to Rs 6000 crore to the Central Public Sector Undertakings.

About UDAY Scheme
UDAY was approved to provide financial turnaround and revival of Power Distribution companies (DISCOMs). It envisages reducing interest burden, cost of power and AT&C losses.

  • Under the UDAY scheme, state governments which own the distribution utilities, would take over 75% debts of Discoms as on 30th September, 2015 in two years and pay back the lenders by selling bonds. For the remaining 25%, discoms will issue bonds.