ONE TIME SECURITISATION OF ELECTRICITY
DUES TRIPARTITE AGREEMENT
SIGNED
Government and Reserve
Bank of India today signed a Tripartite Agreement with States
for a one time settlement of State Electricity Dues. So far, 24
states have signed the TPA. Highlights of the Tripartite Agreement
are securitisation of the old arrears of SEBs amounting to Rs.37,400
crore; waiver of 60% of the interest/surcharge (Rs.8,300 crore)
payable by the SEBs; net outstanding converted into tax-free SLR
Bonds with interest rate of 8.5% per annum; repayment period of
15 years with a moratorium of 5 years; incentives amounting to
Rs.6,100 crore over a period of 4 years to States participating
in the Scheme; full payment of current bills through Letters of
Credit and commitment of the States to undertake Reforms based
on performance milestones. This one time settlement will make
concerned Electricity Boards bankable entities.
The scheme is a follow
up on the Montek Singh Ahluwalia Committee recommendations and
covers the outstanding dues payable by the SEBs to the PSUs under
the Ministry of Power, Coal India Limited & its subsidiaries,
Neyveli Lignite Corporation, Nuclear Power Corporation and the
Ministry of Railways. In addition, States undertaking reforms
shall also be assisted through Accelerated Power Development and
Reform Programme grants and discretionary allocation of Power.
The Agreement envisages
RBI agreeing to the entire principal and 40% surcharge being securitised
in the form of RBI bonds on behalf of the respective State Governments
with tenure of 15 years, there will be a moratorium of five years
for redemption of bonds, only 10% of the bonds can be traded in
the market by the CPSUs every year and the bonds will carry an
interest rate of 8.5% and the interest will be tax free.
Power Minister, Shri
Anant Geete has lauded the securitisation of State Electricity
Dues. He said that the Tripartite Agreement signed today between
Government of India, Reserve Bank of India and the States would
go a long way towards achieving the goal of quality and affordable
power for all. The Minister added that State power utilities will
need to reorient their working on commercial lines. Central and
State Governments will have to initiate policy measures for speedy
reform of the power sector. Smt. Jayawanti Mehta, Minister of
State for Power, in her address said that the toughest roadblock
stalling power sector development has been the poor financial
health of the SEBs.
