Tata Power said Friday it received the letter of intent (LoI) from the Odisha Electricity Regulatory Commission for distribution of power to consumers in western and southern parts of the state through the respective discoms, Wesco and Southco, for the next 25 years. The company had, last December, won the distribution license for CESU, another Odisha discom. It is also the sole bidder for Nesco, the remaining discom in the state.
Tata Power will own a 51 per cent stake in the discoms, while the remainder 49 per cent will be held by the government of Odisha. In FY19, the four Odisha discoms had cumulatively posted a loss of Rs 1,539 crore, of which Nesco losses comprised only Rs 2 crore.
Tata Power has committed to make a capital expenditure of Rs 2,830 crore cumulatively between FY22 and FY26 on Wesco and Southco discoms.
It aims to reduce aggregate technical and commercial (AT&C) losses of Southco from the current level of 35.3 per cent to 14.8 per cent in ten years. For Wesco, AT&C losses are targeted to be cut to 9.1 per cent from 27.6 per cent in the same period.
In Delhi, where Tata Power has a similar public-private partnership model with the Delhi government, the company has managed to reduce AT&C losses from the high of 53 per cent in 2002 to around 8 per cent at present.
About Nesco, for which the company is the sole bidder, Praveer Sinha, CEO & MD, Tata Power, had told investors in November that “the regulator and the government is taking a view on whether they would give it to us based on our offer or there is going to be a rebid”.
Discom business plays a major role in Tata Power’s five-year planning, as it envisages consumer base in this front to rise to 20 million from the current 2.6 million subscribers. With growing opportunities in discom privatisation, the company is targeting Rs 27,000 crore revenue from transmission and distribution business by FY25. FE
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