In order to provide interest subsidy on loans raised by distribution companies to improve the distribution network, National Electricity Fund (NEF), an interest subsidy scheme has been set up, said the Union Minister of State for Power Jyotiraditya M. Scindia in the Lok Sabha on August 28.    

Under the Scheme, loan amounting to Rs 25,000 crore sanctioned by lenders during the financial year 2012-13 & 2013-14 for capital projects in distribution sector duly approved by the Steering Committee shall be eligible to take the benefits of interest subsidy for a tenure of 13 years based on annual evaluations as per the guidelines.    

NEF does not cover the works undertaken under Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) and Restructured Accelerated Power Development and Reforms Programme(R-APDRP) schemes.    

The pre-conditions for eligibility under NEF are linked to reform measures taken by the States and the amount of interest subsidy is linked to the progress achieved in reforms linked parameters.    

The pre-condition for eligibility are operationalisation of State Electricity Regulatory Commission, Formulation of business plan for turnaround of utilities, Reorganization of State Electricity Boards (SEBs), Release of subsidy by State Government to DISCOMs, Submission of audited annual accounts and Timely filing of tariff petition.    

Further, the eligible DISCOMs shall be scored against - Reduction in AT&C losses; Reduction in revenue gap (Average Cost of Supply (ACS)-Average revenue realized on subsidy received basis); Return on equity and Multi-year tariff (MYT).    

The State Discoms operating in the States of Maharashtra, Andhra Pradesh, Haryana, Uttarakhand, Himachal Pradesh, West Bengal, Madhya Pradesh, Chhattisgarh, Rajasthan, Delhi, Gujarat, Karnataka, Tamil Nadu & Punjab have so far availed the benefits of the NEF, Scindia said.