Odisha Electricity Regulatory Commission (OERC) has awarded the letter of intent to Tata Power informing the company’s selection as the successful bidder to own the licence for the distribution and retail supply of electricity in Odisha’s five circles, together constituting Central Electricity Supply Utility of Odisha (CESU).
The five electrical circles constituting CESU are the areas of Bhubaneswar (Electrical Circle – I and II), Cuttack, Paradip and Dhenkanal. The licence is being offered for 25 years initially.
CESU is spread over 30,000 sqkm with a population of over 1.4 crore and a 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 kwh, as of FY18.
Currently, Tata Power has total consumer base of 2.5 million across Mumbai, Delhi and Ajmer and with the acquisition of CESU, its consumer base would double to touch 5 million.
The proposed sale of CESU to Tata Power will be through the formation of a special purpose vehicle. Tata Power has been informed that the Odisha government will own 49 per cent equity stake in the proposed SPV and Tata Power will hold 51 per cent equity along with management control.
“Tata Power has several successful public-private partnerships in generation, transmission & distribution in the country. Recently, our focus has been on increasing the company’s existing footprint in distribution of electricity through public-private-partnerships with discoms. This tie up with CESU is the latest such partnership in the distribution business,” according to Praveer Sinha, CEO & MD, Tata Power.
Tata Power has vast experience in power distribution sector with its presence in Mumbai, Delhi and Ajmer. Tata Power has been a benchmark performer in Delhi, wherein a similar PPP model was formed after privatization of Delhi Vidyut Board in 2002. AT&C losses have been brought down from a high of 53 per cent in 2002 to around per cent.
Tata Power will form a joint venture with Odisha government for the power distribution in the eastern state, on the lines of Tata Power Delhi Distribution Ltd, a similar joint venture with Government of NCT of Delhi, operating in north Delhi. Seen here is a file photograph of Tata Power DDL’s then newly-inaugurated Narela grid substation.
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