Govt finalises norms for discom debt recast

The government has also extended the deadline to July 31 for states to participate in the power ministry’s ambitious debt recast plan.

Written by Press Trust Of India | New Delhi | Published: April 6, 2013 2:34 am

The Centre on Friday said the bonds to be issued by states,backed by it under the debt recast plan for power distribution utilities,will attract about 0.5 per cent premium over the issue price,yet to be determined.

The government has also extended the deadline to July 31 for states to participate in the power ministry’s ambitious debt recast plan.

The accumulated losses of the state power distribution companies (discoms) are estimated to be about Rs 1.9 lakh crore as on 31st March,2011.

“Yes,we have decided to extend the date for FRP (Financial Restructuring Package) from March 31 to July 31,” power secretary P Uma Shankar told reporters here.

He said the power ministry,in consultation with other ministries,has finalised the guidelines for calculating the rate of interest on bonds to be issued by states and they will be guaranteed by the Centre.

“The states will now factor these guidelines in their proposals and come back to the government,” Shankar said. According to the new guidelines or transitional finance mechanism,the government will provide five-year security and state development loan backed by it.

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