National Electricity Fund

The National Electricity Fund (NEF) is being set up to provide interest subsidy on loans to be disbursed to the Distribution Companies (DISCOMS) both in the Public and Private Sector, to improve the distribution network for areas not covered by RGGVY and RAPDRP Project areas, the pre condition for eligibility are linked to certain reform measures taken by States and the amount of interest subsidy is linked to the progress achieved in reforms linked parameters. The nodal agency for NEF would be Rural Electrification Corporation Ltd. The implementation of the Scheme would result in reduction in AT&C losses, reduction of gap between average cost of supply and average revenue on subsidy received basis, improving return on Equity and issue of notification of multi year tarrif alongwith investment in Distribution Sector. This Scheme will facilitate Central Govt. intervention, and catalyst for revamping and restructuring the State Sector Distribution Scheme. The CCEA has approved the NEF Scheme on 13.12.2011.