National Electricity Fund
The Government of India has approved the NEF (Interest Subsidy) Scheme to promote capital investment in the distribution sector by providing interest subsidy, linked with reform measures, on the loans taken by public and private power utilities for various capital works under Distribution projects. This scheme shall be applicable in the entire country and all the works except the works covered under & R-APDRP projects (to ensure non-duplication and non-overlapping of grant/subsidy towards investment). NEF Scheme has the provision to provide interest subsidy and other charges aggregating to Rs.8,466 crore for a period of 14 years on loans availed by distribution utilities in both public and private sector.
As per the Working Group on Power of 12th plan, the requirement of funds for the power sector was estimated as Rs 10,31,600 crore for the XI Plan which includes Rs 5,66,396 crore for the Generation sector, Rs 15,875 Crores for Renovation & Modernization of existing Generation plants & Rs 4,47,000 crore for the Transmission and Distribution (T&D) sector including DDG. The fund requirement envisaged for distribution sector including DDG was Rs. 3,07,000 crores however likely expenditure in the 11th plan is Rs. 1,00,000 crore i.e. only about 32.57%. The distribution sector is the most important and the weakest link in the power sector value chain, which channelizes all the revenues and responsible for overall stability of the sector. The Creation of National Electricity Fund becomes more relevant since this will encourage utilities to match the investments with the planned Generation capacity targts for XII Plan.
For more information on NEF, visit nefgov.in.