Tata Power Company has received the letter of intent (LoI) from Odisha Electricity Regulatory Commission for distribution of power in the five circles of Central Electricity Supply Utility (CESU) for the next 25 years. The five electrical circles include Bhubaneswar (Electrical Circle-I and II), Cuttack, Paradip and Dhenkanal, the company said in a statement.
The proposed sale of CESU will be through a special purpose vehicle (SPV), where Tata Power will own 51% stake in the SPV with their management, while the remainder 49% will be held by the government of Odisha.
Separately, Tata Power has also bid for other distribution utilities in Odisha, such as NESCO, WESCO and SOUTHCO, where the LoIs will still be issued by the Electricity Regulatory Commission of Odisha.
Tata Power has presence in Mumbai, Delhi and Ajmer as a power distributor and has a total customer base of 25 lakh and with the acquisition of CESU, it is expected to double with another 25 lakh customers getting added to its portfolio. In Delhi, wherein Tata Power has similar public private partnership model with the Delhi government, the company has helped in reducing the aggregate technical and commercial losses from the high of 53% in 2002 to around 8% at present.
“Recently, our focus has been on increasing the company’s existing footprint in distribution of electricity through Public-Private-Partnerships (PPP) with discoms. This tie up with CESU is the latest such partnership in the distribution business,” said Praveer Sinha, CEO & MD, Tata Power.
CESU is spread over 30,000 sq km with population of over 1.4 crore and consumer base of 2.5 million. The average demand of CESU is around 1,300 MW with the annual input energy of 8,400 million units as of FY 2018. “We hope to transform Odisha distribution system with 24 x7 reliable power and unmatched customer services with extensive social engagement using our existing experience in distribution of electricity in Delhi, Mumbai and Ajmer,” said Sanjay Banga, President-T&D, Tata Power.
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Source: Financial Express
