The government is keen on fostering an increased play by private sector players in the country's electricity distribution sector, union power, coal and renewable energy minister Piyush Goyal said. After a three hour-long meeting with the representatives of banks and financial institutions, the power ministry is learnt to have asked bankers to work on a three-year roadmap addressing the funding concerns. Goyal said that issues of last-mile funding of projects — financing issues that arise when the project moves into final stage of completion — would also be looking into.
The banking sector is learnt to have raised concerns over the lack of economic viability of upcoming projects in the generation sector in the wake of fuel uncertainties and the rising pile of losses in the distribution segment.
"Two keys aspects of the crisis in the power sector that were discussed in today's meeting were ensuring more and more private participation in distribution and providing last mile funding for projects," Goyal told newspersons after the meeting.
ICICI Bank managing director Chanda Kochhar, State Bank of India chairperson Arundhati Bhattacharya, Axis Bank chief executive Shikha Sharma and PNB chairman and managing director K R Kamath, Power Finance Corp chairman M K Goel and NTPC chairman Arup Roy Choudhury were among those who attended the meeting.
Excepting Delhi, Mumbai and clusters in Gujarat, West Bengal and Uttar Pradesh, power distribution is largely dominated by state-owned discoms. With less than requisite tariff hikes over the years, the country's 36 major distribution utilities are reported to have accumulated losses of over Rs 2.4 lakh crore as on March 2012.
"This crisis is an opportunity. But restructuring of bad loans for distribution utilities is not an essential task," Goyal said, adding his immediate priority is to ensure adequate funding for discoms and improving the overall health of the sector.
Source- Indian Express