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APR 16 2015

Delhi power bills may get cheaper by 13p/unit

  • Economic Times, ET Bureau / Hyderabad
  • Created: Thu 16th APR 2015

The cost of power for large sections of consumers in Delhi could drop by up to 13 paise/unit as a group of lenders led by the state-owned Power Finance Corporation (PFC) is set to approve a fresh loan of R11,000 crore to the two Reliance Infrastructure’ power distribution companies (discoms) — BSES Yamuna and BSES Rajdhani.

The advances will enable the two discoms, under stress due to delays in monetisation of regulatory assets, to retire existing debt of half the size from a 19-bank consortium led by State Bank of India and pay the dues to the generation and transmission companies. The new loan will come with an interest relief of 1.5-2%.

The PFC, sources said, would extend the loan subject to the Delhi government giving a ‘comfort letter’, sources told FE. The government holds a 49% stake in each of the two BSES discoms, which together cater to nearly two-thirds of the capital’s consumers.

Of the R11,000-crore loan, about R5,000 crore will be disbursed by PFC while the rest will be available from other lenders in the consortium, the sources added.

The tenure of the new loan, if approved, could be for a period of seven to eight years and the interest savings for the BSES firms would translate to about R250 crore annually.

RInfra will be pledging its entire 51% of shareholding in BSES discoms to the PFC-led consortium to avail of the loan. The discoms have been urging the state government since early January for a Letter of Comfort for the loan approval. The Arvind Kejriwal-led government, which has ordered a CAG audit of the three Delhi discoms (Tata Power Delhi Distribution and the two BSES discoms), is yet to give any commitment in this regard.

In May last year, two short-term loans of R500 crore each from PFC and REC were secured by BSES Rajdhani and BSES Yamuna after the Delhi Electricity Regulatory Commission (DERC) laid a road map to liquidate Rs 11,431 crore revenue gap of the discoms till 2011-12.

As per DERC’s latest estimate, BSES discoms have accumulated regulatory assets (power dues to be paid by the consumer) amounting to nearly Rs 20,000 crore.

Even as these entitlements are to be realised, the discoms are struggling to make payments to generation and transmission companies for power purchases aggregating to Rs 8,000 crore including Rs 6,000 crore to gencos owned by the Delhi government. In addition, the companies have outstanding loans in excess of Rs 5,000 crore.

Tags

Delhi Renewable Energy Certificates Power Finance Corporation Finance Distribution Companies Comptroller and Auditor General Bank of India Electricity Regulatory Commission Power Distribution Delhi government Rural Electrification Corporation Delhi Electricity Regulatory Commission Power Tata Power Electricity Consumer India REC

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