Andhra Pradesh government has issued special securities worth Rs.7,376 crore under the Ujjwal Discom Assurance Yojana (UDAY) Scheme to take over the debt burden of power distribution companies (Discoms).
The Union Government launched the UDAY scheme in 2015 for operational and financial turnaround of Discoms giving the States a two year time time frame to take over debt by 2016-17.
The State tried to seek more time but the Centre refused to extend the time-frame given under the UDAY scheme and on Tuesday for 75 per cent of the Discoms debt amounting to Rs.8,256 crore.
The government issued bonds for an amount of Rs.7,376 crores based on competitive interest bids from the institutions.
For the 70 per cent of the amount, bonds were issued for an interest rate of 7.35 percent and the remaining at 7.35 and 7.37 per cent.
Bids
For the remaining amount of Rs.880 crore, the bids were rejected and they would be taken up later, sources said. The security bonds for the above loan with six equated amounts would have to be redeemed at the end of 10th, 11th, 12th, 13th, 14th and 15th year.
The security bonds were taken by insurance companies and other institutions, sources added. The government would be paying an interest of Rs.600 crore a year, in two half-yearly instalments.
Seventeen States and Union Territories signed MoUs with the Centre under the UDAY scheme. Though the Andhra Pradesh has its own financial constraints post bifurcation, it opted for the scheme meant to improve the performance of Discoms.
