Tata Power wins Odisha discoms bid, will own 51% in two state discoms
Tata Power wins: Tata Power has win bid for two discoms in Odisha. The announcement was made on Friday by India’s largest power generation company that it had received letter of intent (LOI) from Odisha Electricity Regulatory Commission allowing the company to distribute power in western and southern parts of state for next 25 years through their respective discoms – Wesco and Southco.
Last year in December, Tata Power had also won bid for distribution license for another discom in the state, CESU. The power firm is also sole bidder of the only remaining discom in Odisha, Nesco.
After winning the bid, Tata Power will own 51% stakes of the discoms, while remaining 49% will be owned by Odisha government. Tata Power has committed of making a capital expenditure of INR 2,830 crore between FY22 and FY26. This will be on Wesco and Southco discoms.
The four discoms in Odisha had cumulatively filed loss of INR 1,539 crore in FY19. Out of this Nesco’s losses were just INR 2 crore.
Tata Power has targeted to reduce Southco’s aggregate technical and commercial (AT&C) losses from the current 35.3% to 14.8% in next 10 years. Furthermore, it has targeted to cut AT&C losses for Wesco from 27.6% to 9.1% during same time frame.
It must be noted that Tata Power has similar public-private partnership (PPP) model in Delhi where the government has managed to reduce its AT&C losses from 53% in 2002 to current level at 8%.
Praveer Sinha, CEO & MD, Tata Power said regarding Nesco of which the company is the sole bidder, 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.” This was told to the investors in November.
With addition to both the Odisha discoms to Tata Power’s portfolio, the company’s consumer base will extend to 10 million consumers from current 5.7 million, spreading across Delhi, Mumbai, Ajmer and Central part of Odisha.