Companies

Tata Power seeks to triple discom business

Mumbai | Updated on November 01, 2018 Published on November 01, 2018

Praveer Sinha, MD & CEO, Tata Power   -  PAUL NORONHA

Banking on its experience in turning around loss-making electricity distribution companies in Delhi and Ajmer, as well as due to lack of appetite for distribution franchises from other private players, Tata Power is planning to grow its distribution business by three times, from the current 5,000 MW to 1,5000 MW.

“Right now we are 2.2 million consumers and we could become 10 million in the 3-5 years,” MD and CEO Praveer Sinha said on the sidelines of the 2nd Distribution Utility Meet hosted by Tata Power.

According to Sinha, several States, including Odisha, Maharashtra, UP, Rajasthan and Jharkand, have identified several cities or areas where electricity distribution will be privatised to reduce aggregate technical and commercial (AT&C) losses of public discoms that are estimated around 20 per cent on an average.

“Right now the distribution business would be about one third of revenue and around 40 per cent of our profit,” Sinha told BusinessLine. “Distribution is our focus area since there is great opportunity. There are not many people in the country who have domain experience and knowledge, and we have those,” he added.

Tata Power recently submitted its bid for Central Electricity Supply Utility of Odisha (CESU Odisha), having over 2 million consumers. The results of the tender are expected in February-March next year. According to Sinha, there was only one other bidder participating while large players in the space, such as Adani Group and Torrent, stayed away.

Mundra losses

In the thermal generation sector, Tata Power’s 4000 MW Mundra plant in Gujarat is likely to continue making losses even if the Central Electricity Regulatory Commission (CERC) comes out with a favourable resolution. (The Supreme Court, earlier this week, directed CERC to consider amending power purchase agreements.)

Tata Power is still waiting to close the transaction for a 75 per cent stake in Prayagraj Power Generation Co Ltd, a 3 x 660MW coal-based power plant in UP.

In August, the lenders of the company issued a Letter of Intent to Resurgent Power Ventures, a platform backed by Tata Power, ICICI and other investors. However, according to Sinha, closing the transaction will take time as one of the 23 lenders to the project has not yet approved it.

Published on November 01, 2018
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