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Home News Power Sector News Cesu may get conditional assistance under R-APDRP

Cesu may get conditional assistance under R-APDRP

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Naveen PatnaikCentral Electricity Supply Utility of Odisha Ltd (Cesu), a private distribution company operating in central parts of the Odisha state, may get financial assistance from Union ministry of power (MoP) under Restructured Accelerated Power Development and Reform Programme (R-APDRP). Since electricity distribution business was privatised in Odisha, the state was not eligible to get funds under the programme which excludes private utilities.

MoP has held that Cesu which is managed by Odisha Electricity Regulatory Commission (OERC) may be eligible to avail R-APDRP assistance through the state government.

"As per R-APDRP guidelines, the private utilities are not eligible for funding under R-APDRP. However, in states where the distribution functions are being performed by the power department, R-APDRP funding is being given to the state government. Therefore, it may be possible to extend fund to Cesu through the state government," Devender Singh, joint secretary, MoP stated in a letter to G Mathivathanan, state energy secretary.

The letter has sought the consent of the state government for receiving funds under R-APDRP, channelizing them to distribution sector in Cesu areas as per the requirement of the scheme, undertaking the responsibility of fulfilling the conditions prescribed in the scheme and accepting the obligation of repayment of the loan," the letter added.

Meanwhile, the state energy department has urged Cesu to take a decision at the board level for accepting R-APDRP assistance and obligation of repayment of loan through the state government.

It may be noted, the Odisha government has been persistently demanding financial assistance under R-APDRP. Chief Minister Naveen Patnaik had sought the intervention of Prime Minister Manmohan Singh in this connection in February this year.

Stating that by availing R-APDRP assistance many states have substantially reduced the AT&C (aggregate technical & commercial) losses to below 25 per cent, Patnaik said that Odisha was suffering AT&C loss of about 40 per cent on being deprived of R-APDRP assistance.

The R-APDRP as a central sector scheme is being implemented with the objective of upgrading the sub-transmission and distribution network, including energy accounting and metering in the urban areas having population of more than 30,000.

As part of the reforms process, the Odisha government had unbundled the erstwhile Odisha State Electricity Board (OSEB) by structural separation and corporatisation of generation, transmission and distribution. Fifty one per cent of OSEB's shares were transferred to four distribution companies- Cesu, Nesco, Wesco and Southco.

The reforms were carried out with the assumption that substantial investment in capital works coupled with investment in working capital under the regulatory mechanism of the OERC would result in reduction of AT&C losses. Initially assisted by the World Bank and UK-based Department of International Development (DFID), Odisha took the initiative and became the pioneer state to reform the electricity sector.

However, the World Bank stopped financing capital projects midway and the distribution companies could not mobilize investment as a result of which the objective of substantial reduction of AT&C losses could not be achieved.

Source- Business standard


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