Odisha government to privatize four state-owned power distribution firms

In the first such move in nearly two decades in India’s power sector, the Odisha government is set to privatize four state-owned electricity distribution companies, said two people aware of the development.

While Crisil has been given the mandate for managing the sale of Western Electricity Supply Utility of Odisha Ltd (WESCO) and Southern Electricity Supply Utility of Odisha Ltd (SOUTCO); Deloitte has the mandate for North Eastern Electricity Supply Company of Odisha Ltd (NESCO). The drive is headed by Odisha Electricity Regulatory Commission (OERC).

Odisha has an average power demand of 4,000 megawatts (MW). While WESCO supplies electricity to consumers in the distribution circles of Rourkela, Burla, Balgarh, Bolangir and Bhawanipatna, SOUTCO supplies consumers in the distribution circles of Behrampur, Aska, Bhanjanagar, Jeypore and Rayagada. NESCO supplies electricity to the districts of Balasore, Mayurbhanj, Keonjhar, Jajpur, and Bhadrak. The potential sales would be the first transaction since the 2003 privatization of power distribution in Delhi.

However, the power distribution sector has also started witnessing large transactions. While Hyderabad-based Greenko Group, backed by Singapore’s sovereign wealth fund GIC Holdings Pte and Abu Dhabi Investment Authority, had evinced interest in acquiring Reliance Infrastructure Ltd’s Mumbai power business, it was Adani Transmission Ltd that emerged successful for the ₹18,800 crore deal in December 2017.

“Tata Power was the only technically qualified bidder for CESU. The financial bids have opened. The Odisha government’s approval is now awaited to take it ahead," said one of the two people cited above.

Feedback Energy Distribution Co. Ltd (FEDCO) and India Power Corp. Ltd had also placed a joint bid for CESU, Mint reported on 11 October last year.

“We have submitted the bids for CESU PPP project. The technical and price bids have been opened. The evaluation process is on. We are yet to hear from OERC (which had carried out the bidding process) on the outcome of the bids," a Tata Power spokesperson said in an emailed response.

Only one bidder had turned up in an earlier attempt to privatize CESU Odisha, forcing the cancellation of the process. The Central Electricity Supply Company of Odisha Ltd (CESCO), CESU Odisha’s forerunner, was privatized in 1999 with the licence granted to US-based electricity producer AES Corp. The OERC revoked the licence in 2005.

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