World Bank approved $250 million loan to Reforms in Rajasthan

(Old news : 25 march) The World Bank Board approved a 250 million US dollar Development Policy Loan (DPL) for Rajasthan. The loan was granted to support the government of Rajasthan in improving the performance of its electricity distribution sector under the State’s 24×7 Power for All program.

The First Programmatic Electricity Distribution Reform Development Policy Loan for Rajasthan will be the first in a series of two operations for a comprehensive turnaround of Rajasthan’s electricity distribution sector.

The key areas that the operation will support

  • Strengthening governance in the distribution sector in the state by giving more operational autonomy to the utilities
  •  Establishing targets for reducing the gap between the cost of supply and revenue recovery
  • Providing incentives to employees for improving performance
  • Financial restructuring and recovery in the sector through transferring considerable amount of the debt of the DISCOMs to the state
  •  Bringing in more discipline in DISCOMs submissions to regulatory commission towards revenue requirements and initiatives towards reducing the costs of energy procurement
  •  Improving the operational performance of the DISCOMs

The loan, from the International Bank for Reconstruction and Development (IBRD), has a 5-year grace period, and a maturity of 18 years.


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