Tata Power announces getting LoI for Odisha’s WESCO and SOUTCO discoms2 min read . Updated: 04 Dec 2020, 10:47 PM IST
With the two discoms Tata Power will be supplying electricity to consumers in Mumbai, Delhi, Central part of Odisha and Ajmer
New Delhi: Tata Power Co. Ltd on Friday announced that it has received the Letter of Intent (LOI) for supplying electricity to the consumers of two electricity distribution companies (discoms) in Odisha—the Western Electricity Supply Company of Odisha Ltd (WESCO) and the Southern Electricity Supply Utility of Odisha Ltd (SOUTCO).
Mint first reported on Thursday about Tata Power emerging as the winner in bids for these two discoms in the privatisation exercise. While WESCO supplies electricity to consumers in the distribution circles of Rourkela, Burla, Balgarh, Bolangir and Bhawanipatna, SOUTCO serves Behrampur, Aska, Bhanjanagar, Jeypore and Rayagada.
Tata Power in a statement on Friday said that it has received the Letter of Intent (LOI) from the Odisha Electricity Regulatory Commission (OERC) for the distribution and retail supply of electricity in Odisha's five circles of WESCO and six circles of SOUTHCO.
A consortium of India Power Corp. and French government-owned power utility Electricite de France (EDF) were the only other bidders for WESCO and SOUTCO respectively. However, their bids weren’t technically qualified, resulting in only Tata Power’s bids being opened on Thursday. While PwC was managing the sale of WESCO, Deloitte had the sale mandate for SOUTCO.
“As per conditions of bid documentation Tata Power will hold 51 percent equity with management control and the state-owned GRIDCO will have the remaining 49 percent equity stake in the company," the statement added.
This comes after Tata Power won a 25-year licence for distribution and retail supply of power in five circles of Central Electricity Supply Utility of Odisha (CESU Odisha) last December. Tata Power is also now the only bidder for North Eastern Electricity Supply Company of Odisha Ltd (NESCO), which supplies electricity to the districts of Balasore, Mayurbhanj, Keonjhar, Jajpur and Bhadrak, which has prompted the OERC to seek legal opinion.
“It is a proud moment for us. We are thankful to the Odisha Government and OERC for giving us this opportunity," said Praveer Sinha, CEO and MD, Tata Power in the statement.
Odisha has an average power demand of 4,000 MW. It was the first state to privatize its power distribution sector into four discoms in 1999. This was followed by Delhi, which privatized three of its discoms in July 2002—BSES Rajdhani Power Ltd (BRPL), BSES Yamuna Power Ltd (BYPL) and Tata Power Delhi Distribution Ltd.
“While WESCO serves close to 2.0 million consumers with annual input energy of 7520 MUs, SOUTHCO serves close to 2.3 million consumers with annual input energy of 3470 MUs. With WESCO and SOUTHCO, with the addition of both the discoms, Tata Power's consumer base will reach 10 million consumers from the present base of 5.7 million across Mumbai, Delhi, Central part of Odisha and Ajmer," the statement added.