World Bank approves 2,000 cr for power reforms in Rajasthan
August 10, 2018
World Bank (WB) has approved USD 250 million (approx Rs 1,717 crore) for second programmatic electricity distribution reform in Rajasthan. The reforms will help accomplish objectifies of Government of India’s ‘power for all’ campaign that aims to provide 24 hours electricity supply to each household by 2019.
The world bank assistance is second of the two development policy loans that supports Rajasthan government’s effort towards the power for all campaign. Strengthening governance framework and financial structuring is one of the objectives of the policy loan along with improvement in operational performance.
The reforms have been introduced in Rajasthan with support of union government and World Bank keeping in mind the financial distress at electricity distribution companies (DISCOM). The world bank had approved of loan of an equal amount for the first phase in March last year as well. According to the World Bank report, “The electricity sector in Rajasthan has expanded and improved over time, but was facing serious financial challenges during 2015 that threatened sustainability of the supply going forward.” In the year, DISCOMs in Rajasthan recorded highest amount of debt as compared to DISCOMs in other states. Several measures have since been taken to improve the financial status of the distribution companies and new reforms will be provisioned for the outstanding loans to be absorbed by the state government.
The new reforms vision to reduce gap between distribution cost and revenue generated for distribution companies and increase in number of pre-paid meters and similar connections. It also holds distribution of performance based incentives to the DISCOM employees as a target criteria.
As the reforms target to make the electricity distribution ‘sustainable’, the electricity tariff are expected to rise subsequently. The concerned authority though admit that the existing electricity tariff in the state are a little above the affordability standards.
World Bank has approved approximately Rs 1,717 crore for second programmatic electricity distribution reform in Rajasthan. The reforms will help accomplish objectifies of Government of India’s ‘power for all’ campaign that aims to provide 24 hours electricity supply to each household by 2019.