Tata Power on Friday mentioned it received the letter of intent (LoI) from the Odisha Electricity Regulatory Commission for distribution of energy to the shoppers in western and southern components of the state via the respective discoms – Wesco and Southco – for the subsequent 25 years. The firm had won the bagged CESU, one more Odisha discom in December 2019. It is also the sole bidder for Nesco, which the only other discom in the state.
Tata Power will personal a 51% stake in the discoms, when the remainder 49% will be held by the government of Odisha.
The 4 Odisha discoms had cumulatively recorded a loss of Rs 1,539 crore in FY19, of which Nesco losses comprised only Rs 2 crore.
Tata Power has committed to make a capital expenditure of Rs 2,830 crore cumulatively among FY22 and FY26 on Wesco and Southco discoms. It aims to minimize aggregate technical and industrial (AT&C) losses of Southco from the present level of 35.3% to 14.8% in ten years. For Wesco, AT&C losses are targeted to be reduce to 9.1% from 27.6% in the similar period.
In Delhi, exactly where Tata Power has a comparable public-private partnership model with the Delhi government, the firm has managed to minimize AT&C losses from the higher of 53% in 2002 to about 8% at present. About Nesco, for which the firm 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 company plays a significant function in Tata Power’s 5-year arranging, as it envisages customer base in this front to rise to 20 million from the present 2.6 million subscribers. With expanding possibilities in discom privatisation, the firm is targeting Rs 27,000 crore income from transmission and distribution company by FY25. Tata Power’s revenue from discoms in FY20 was Rs 11,186 crore.
After the current acquisition of the Odisha discoms, Tata Power at the moment has the biggest customer base amongst private discoms. It sees substantial privatisation possibilities on the horizon, and expects significant discoms in Uttar Pradesh, Odisha, Rajasthan, Madhya Pradesh, Jharkhand and eight Union Territories to be quickly supplied for private takeovers. “The success of our Delhi, Mumbai and Ajmer Distribution including improvements in central Odisha in a short span of time is winning the hearts of people of Odisha,” Sinha mentioned.
Meanwhile, the firm informed the exchanges of Friday that Coastal Gujarat Power (CGPL), the Tata Power unit that runs the 4,000 MW Mundra energy plant, has repaid Rs 1,550 crore of bank loans. With this, the unit has cleared its whole bank loans of Rs 4,150 crore. “After this repayment, CGPL’s long-term debt comprises only Rs 3,790 crore of bonds and debentures,” the firm mentioned.