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Union Government, World Bank and Rajasthan sign agreement to improve power distribution in Rajasthan

Aug 29, 2018 09:17 IST
Union Government, World Bank and Rajasthan sign agreement to improve power distribution in Rajasthan
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The Union Government, Rajasthan and the World Bank on August 28, 2018 signed a USD 250 million Development Policy Loan (DPL) to support Rajasthan in improving the performance of its Electricity Distribution Sector under the State’s ‘24x7 Power for All’ program.

The Agreement for the Project was signed by Sameer Kumar Khare, Joint Secretary in the Department of Economic Affairs, Union Ministry of Finance; P. Ramesh, Special Secretary of Rajasthan; and Hisham Abdo, Acting Country Director of World Bank India.

The loan from the World Bank’s International Bank for Reconstruction and Development (IBRD), has a 3 year grace period and a maturity of 21 years.

Key Highlights of the Electricity Distribution Sector Reforms in Rajasthan

• This ‘Second Programmatic Electricity Distribution Reform Development Policy Loan’ for Rajasthan is the second in the series of two operations planned for a comprehensive turnaround of Rajasthan’s electricity distribution sector. The First Loan closed in March 2017.

• It will deepen the Institutional and Operational Reforms that were launched in late 2015 centered on the Ujwal DISCOM Assurance Yojana (UDAY) of the Union Government, which Rajasthan joined in 2016.

• It will also intensify reforms on the basis of the Rajasthan State Electricity Distribution Management Responsibility (RSEDMR) Act, which aims to reform the Governance of DISCOMs and bring greater public accountability in their functioning.

• It also supports the Union Government’s Domestic Efficient Lighting Program (DELP), under which more than 15 million LED lamps have been distributed in the State.

• It will continue to support the ongoing reforms that the distribution companies are making for a financial turnaround.

Key Areas

The key areas that the program will support are:

  • Strengthening governance in the distribution sector in the state by establishing Annual Performance MoUs between the DISCOMs and the State Government
  • Putting in place a Performance Management System
  • Providing incentives to employees for improving performance
  • Financial Restructuring and recovery in the sector by transferring considerable amounts of the DISCOMs debt to the State
  • Bringing in more discipline in the revenue requirements of DISCOMs
  • Taking initiatives in reducing the costs of energy procurement
  • Improving the operational performance of the DISCOMs through initiatives like publishing feeder level energy audits and increased usage of IT among others

Significance

The Program is aligned to the Broader Reform Program ‘UDAY Scheme’, developed by the Union Government and adopted by the Rajasthan Government to improve the performance of DISCOMs in the State.

This will contribute to the State’s Fiscal Sustainability and will provide continuous, reliable power supply to all households in Rajasthan by 2019.

 
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