Three days after meeting heads of private power companies to resolve issues plaguing the sector, power minister Piyush Goyal on Monday met top bankers including ICICI Bank MD and CEO Chanda Kochhar and SBI chairperson Arundhati Bhattacharya and discussed hurdles affecting funding of power projects, which, coupled with high debt, have hit the finances of distribution companies.
Bankers, on their part, expressed concerns relating to fuel supply issues and power purchase problems.
The minister called for increased participation by private companies in electricity distribution to reinstate investor confidence in the sector. "We need to have more private sector participation in power distribution… We have to make this sector self-sustaining and get the support of states for this," Goyal said.
While cities such as Delhi, Mumbai, Kolkata, Ahmedabad and Odisha currently have privately-owned power distribution firms, state electricity boards, which distribute power in most other parts of the country, have been struggling with financial problems. The UPA government had even approved the restructuring of Rs. 1.9 lakh crore of debt of state electricity boards in a move to turn around the sector.
The RBI last year relaxed the external commercial borrowing norms for companies raising foreign funds for infrastructure projects especially in sectors such as power.
"We have all resolved that we shall work as a team to bring about synergy and sort out the problems in the sector," Goyal told reporters after the meeting.
"In the next few months, you can expect a significant thrust to enhance the transmission and distribution infrastructure in the country from states, banks and the Centre," Goyal added.
"More private participation in power distribution means good technology, more capital and better management," said Debasish Mishra, senior director, Deloitte India.
Earlier, the minister held a meeting with the Association of Power Producers to discuss the situation especially in the wake of the acute electricity crisis in the Capital. Goyal also said he would help power producers resolve the situation, though he warned them against any form of cartelisation.