'10 states on board for centre's debt recast plan for discoms'

As many as 10 states have come on board to avail of Centre's ambitious financial restructuring scheme for discoms, the Ministry of Power said today.

"The states which have conveyed their in-principle willingness to participate in the scheme as on April 25 are Andhra Pradesh, Bihar, Haryana, Himachal Pradesh, Jharkhand, Kerala, Meghalaya, Rajasthan, Tamil Nadu and Uttar Pradesh," an official statement said.

Last year, the government announced the financial restructuring package for the power distribution companies (discoms) which are reeling under losses of Rs 2.46 lakh crore (as on March 2012).

The government will recast Rs 1.5 lakh crore debt of the state electricity boards.

As per the plan, the central government will provide 25% capital reimbursement of principal repayment by the state government on the liability taken over by it.

Under the scheme for state-owned discoms, the respective state governments are to take over 50% of outstanding short-term liabilities up to March 31, 2012.

This will be first converted into bonds to be issued by discoms to participating lenders, duly backed by State Government guarantee.

Takeover of the liability by state government from discoms in the next 2-5 years by way of special securities and repayment and interest payment to be done by the state government till the date of takeover.

The last date for the states to register for the recast plan has been extended to July 31, from March 31 earlier.