The Indian State of Jharkhand has started to unbundle its State Electricity Board (SEB), a mandatory step for undertaking the Financial Restructuring Package (FRP) aimed at nursing back ailing power distribution companies (Discoms) to health. The total losses accumulated by Discoms are estimated to be about Rs 1.9 Lakh crore (US$31.8bn) as on 31 March 2011. Under the debt recast plan, the state governments will take over 50% of the outstanding short-term liabilities of the Discoms, up to 31 March 2012. The debt would then be converted into bonds to be issued by Discoms to participating lenders. This scheme is only available for distribution companies, making unbundling mandatory. So far, the States of Bihar, Andhra Pradesh, Uttar Pradesh, Tamil Nadu and Haryana have come forward to avail the scheme. Himachal Pradesh and Meghalaya have also evinced interest. Kerala has also come forward for the debt recast plan but power utilities there are yet to be unbundled.
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