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A host of companies and large funds from India and overseas are likely to compete in the privatization exercise of power distribution utilities in the Union territories, attracted by their robust per capita power consumption, said three people with knowledge of the matter.

Among local companies interested in the assets are state-run NTPC Ltd, electricity generation and distribution company CESC Ltd, Torrent Power, Greenko Group, Tata Power, National Investment and Infrastructure Fund (NIIF) and Adani Group, the people said requesting anonymity.

Large foreign utilities such as Italy’s Enel Group, Malaysia’s Tenaga Nasional Bhd, Electricite de France SA and Hong Kong’s biggest electricity provider China Light and Power Co. Ltd are also expected to participate, they said.

The third set of probable investors include funds such as Brookfield Asset Management Inc., Caisse de dépôt et placement du Québec, CDC Group Plc, Macquarie Group and Actis Llp.

Queries emailed to spokespersons at India’s power ministry, NTPC, CESC, Torrent Power, Tata Power, NIIF, Adani Group, Tenaga Nasional Bhd, EDF and CLP on Monday night remained unanswered till press time.

While a Macquarie Group spokesperson declined to comment, an Enel Group spokesperson said in an email, “You should address your questions on details of the privatization to the Union power ministry, which is the owner of the process."

A CDPQ spokesperson in an emailed response said, "CDPQ never comments on investments opportunities it may or may not be considering."

Queries emailed to Brookfield and CDC Group also remained unanswered.

The Union government aims to privatize discoms in the Union territories of Dadar and Nagar Haveli, Daman and Diu, Puducherry, Chandigarh, Andaman and Nicobar Islands, Lakshadweep Islands, Ladakh and Jammu and Kashmir discoms. These discoms have an enterprise value of around $700 million.

“There is a lot of interest for these discoms. In discoms such as Dadar and Nagar Haveli and Daman and Diu, the industrial load is high," said the first person cited above.

While Dadar and Nagar Haveli has a per capita electricity consumption of 79,842.5 kilowatt-hour (kWh), Daman and Diu’s per capita electricity consumption is 10,019.76 kWh. In comparison, India’s per capita power consumption is around 1,149 kWh, and among the lowest in the world.

“Privatization of UT (Union territory) discoms is an important step in improving the health of India’s electricity sector. Actis has significant experience in investing in and managing discoms in emerging markets and will be very interested in bidding for these privatizations," said Sanjiv Aggarwal, partner at Actis and head of its Asia energy business.

“There are some interesting assets and we will be looking at it as and when the opportunity arises," said Greenko’s president and joint managing director Mahesh Kolli. The firm is backed by Singapore’s sovereign wealth fund GIC Holdings Pte and Abu Dhabi Investment Authority.

According to experts, a well-designed privatization process holds the key to its success.

“Success of privatization process would depend on clearly defining the objectives (might be different for each asset), clustering distribution operations of UTs to make it viable, ensuring wider participation and structuring out generation and transmission assets," said Sambitosh Mohapatra, partner, power and utilities at PwC India.

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