Uttar Pradesh on Saturday became the first non-BJP ruled state to sign an agreement to join UDAY scheme for revival of discoms, a move that is expected to result in savings of Rs 33,000 crore. “Jharkhand, Chhattisgarh, Rajasthan (which have signed MoUs for UDAY) are BJP states. Now, the largest state of the country -- Uttar Pradesh -- which is not a BJP state has signed MoU on Saturday. Bihar MoU is final. They have invited me to Patna for signing it,” Power Minister Piyush Goyal said at the MoU-signing ceremony.

“Uttar Pradesh would save Rs 33,000 crore in the next three years through UDAY by way of savings in interest cost, reduction in AT&C and transmission losses, interventions in energy efficiency, coal reforms and the like.” Under the agreement, Uttar Pradesh would take over Rs 39,900 crore of discom debt, which is 75 per cent of the total loan of Rs 53,200 crore outstanding as of September 30 last year. The remaining 25 per cent debt of Rs 13,300 crore will be re-priced or issued as state guaranteed discoms' bonds at coupon rates of around 3 per cent less than the average existing interest rate.

The annual saving in the interest cost to the discoms would be around Rs 1,600 crore on account of the state taking over of debt and reduction in interest rates on the remainder. With four states signing MoUs, the Ujwal Discom Assurance Yojana (UDAY) has covered over 35 per cent of the total debt of Rs 4.37 lakh crore of power distribution companies across the country, the minister said. On the occasion, Uttar Pradesh Chief Minister Akhilesh Yadav, in a statement, said, “It is a historic day for the power sector of the state when the Centre and the state have come together to provide round-the-clock electricity supply.”