Rural Electrification Corporation chairman says electricity pilferage is coming down
Geetanjali Minhas | September 28, 2010
With government granting infrastructure finance company (IFC) status to Rural Electrification Corporation (REC), its exposure to private sector will increase from 35% to 40% . ECBs of upto 500 million dollars will not require RBI approval and it will be able to raise infrastructure bonds interest rate below G Sec rates.
In a press conference held in Mumbai, Jairaj Phatak , chairman and managing director, Rural Electrification Corporation while addressing the media said, “In future , we will raise 1 billion dollars of ECB’s . The bulk will come from regular bonds. Infrastructure bonds and 1000 crore of tax free bonds will be another source of borrowings .We have already raised 400 million dollars from east and south east Asian markets. A similar amount may be raised from European markets.”
Answering a question on why electricity is not reaching all regions Phatak said, ‘Each MW requires an investment of 5 crores to take electricity to every region. Transmission and development ( T&D ) requires another 5 crores. Weak states did not have funds and administrative skills to afford this.”
On demand -supply gap Phatak added, “10-15% gap in demand supply will continue. If we can install 1 lakh MW in the 12th plan the demand supply gap will come down. Though power generation has become attractive , new and renewable sources and transmission and distribution are not financially attractive to public sector banks.”’
“Electricity pilferage is steadily coming down . Transmission and Distribution losses (commercial losses ) are coming down by 1% per annum on an average . In Bhiwandi town a sizeable reduction in electricity pilferage has been achieved . It is a steady process and with more improvements we should be able to arrest 10% pilferage like South Korea has done .Regular power supply brings down electricity thefts.”
Answering a question on increasing REC exposure to decentralized power , Phatak replied, “Decentralised Distribution Generation is only going to be effective when the village is not grid connected, else benefits of RGGY are not available. In Chhattisgarh there is a potential of 1112 projects, the target this year is 7. CREDA has already prepared 44 Detailed Project Reports . In Madhya Pradesh 50 DPR’s have been prepared by MPUVN against a target of 6. In Rajasthan against target of 3, JVVN is preparing the DPR . Similarly there is potential in J&K and Gujrat . In Maharashtra we feel most villages can be grid connected in the next three years. In Arunachal , MRNE has taken up small hydel projects so they do not want our DDG.”
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