R-Infra infuses Rs 520 cr more equity in BSES for Delhi discoms

Reliance Infrastructure Ltd (R-Infra), a promoters of BSES, on Monday transferred Rs 520 crore (its 51 per cent share) into the latter’s account for equity infusion in its Delhi distribution companies. This is part of the Rs 5,100-crore financial package being prepared by IDBI Bank, which requires the promoters to bring in 20 per cent equity (Rs 1,020 crore).

This commitment of R-Infra is expected to be followed by the Delhi government infusing its Rs 500 crore (49 per cent share) as confirmed by them earlier, according to a company statement issued on Monday. This infusion of equity by the two promoters would ensure the equity structure of the companies remains the same as since 2002, when power distribution was privatised in Delhi.

Discussions with IDBI are at an advanced stage and are expected to conclude soon. Completion of this process will help arrange long-term debt to finance the cash flow mis-match and enable BSES Delhi to facilitate payments to the generation and transmission companies.

BSES has two power distribution companies in Delhi, BSES Rajdhani Power Ltd and BSES Yamuna Power Ltd.

Committed to BSES
According to Lalit Jalan, CEO of R-Infra, “R-Infra continues to remain committed to BSES Delhi. All efforts are being made to ensure payments to the generation and transmission companies are made quickly, enabling the citizens of Delhi to continue to enjoy 24x7 quality and reliable power.”

“The situation has arisen entirely because of substantial increases in power purchase costs these last few years, coupled with the complete absence of a cost-reflective tariff regime at the distribution level.

Over the last nine years, the power purchase cost for Delhi discoms has increased by 280 per cent, whereas during the same time, the consumer tariff has only increased by 36 per cent. Due to this huge discrepancy between cost increases and revenue, there is a current revenue deficit of nearly Rs 2 a unit, resulting in under-recoveries of Rs 20 crore a day for the three Delhi discoms 9the third is owned by Tata Power),” added Jalan.