The Odisha Electricity Regulatory Commission (OERC) has awarded the Letter of Intent (LOI) to Tata Power Company Ltd for the acquisition of CESU Power Distribution in Odisha, after it emerged as the successful bidder to own the licence.
Odisha’s five circles together constituting the Central Electricity Supply Utility (CESU) are the areas of Bhubaneswar (Electrical Circle – I and II), Cuttack, Paradip and Dhenkanal. The license is being offered for 25 years initially.
“The proposed sale of CESU to Tata Power will be through the formation of a special purpose vehicle entity. Tata Power has been informed that Government of Odisha will own 49 per cent equity stake in the proposed SPV and Tata Power will hold 51 per cent equity with their management,” the filing added.
At present, Tata Power has total consumer base of 2.5 million spread in Ajmer and across major metropolitan cities including Mumbai, Delhi. With the acquisition of the latest licence company’s consumer base is expected to be doubled to hit five million consumers.
Tata Power is a leading integrated power company and, together with its subsidiaries and jointly controlled entities, has an installed capacity of 10,763 MW.
“Recently, our focus has been on increasing the company’s existing footprint in distribution of electricity through Public-Private-Partnerships (PPP) with discoms. This tie up with CESU is the latest such partnership in the distribution business,” Tata Power CEO & MD Praveer Sinha said.
The CESU is spread over 30,000 Sq km and its average demand is around 1,300 MW with the annual input energy of 8,400 MUs (FY2018).
(With input from agencies)