The World Bank has signed a $250m development policy loan (DPL) to support the Indian state of Rajasthan in improving the performance of its electricity distribution sector under the state’s 24x7 Power for All Program.
Image: World Bank supports Indian state with $250m to improve electricity distribution. Photo: Courtesy of Ed Moon/FreeImages.com.
The World Bank, the Government of India and the state Government of Rajasthan have signed the DPL in this regard. This is the Second Programmatic Electricity Distribution Reform Development Policy Loan for Rajasthan.
It is the second in the series of two operations planned for a comprehensive turnaround of the state’s electricity distribution sector. The first loan was closed last March.
The crucial areas that the program will support include strengthening governance in distribution sector by establishing annual performance MOUs between the utilities and the state government; putting performance management system in place; offering incentives to employees for improving performance; and financial restructuring and recovery in the sector by transferring considerable amounts of the debt of the utilities to the state government, among others.
Indian Ministry of Finance, Department of Economic Affairs Joint Secretary Sameer Kumar Khare said: “This program is aligned to the broader reform program, developed by the Government of India (GoI) and adopted by the Rajasthan government, to improve the performance of DISCOMs in the state.
“This will contribute to the state’s fiscal sustainability, and the objective of 24×7 Power for All initiative, which aspires to provide continuous, reliable power supply to all households in Rajasthan by 2019.”
This programme is expected to deepen institutional and operational reforms that were launched in 2015, which centered around the union government of India’s Ujwal DISCOM Assurance Yojna (UDAY), which Rajasthan joined in 2016.
World Bank Country Acting Director for India Hisham Abdo said: “In its second phase, this program will continue to support the ongoing reforms that the distribution companies are making for a financial turnaround.
“Improved financial health of DISCOMS will help free up the state’s resources for spending on social sectors, allowing for businesses to grow and jobs to be created.”