Rs 3,000 Crore Corpus Likely For Power Reforms

The Centre is planning to create a Rs 3,000 crore corpus for the development of transmission and distribution (T&D) systems and for undertaking renovation and modernisation (R&M) activities in the power sector.

Speaking at the launch of NTPC-ABB Alsthom Power Services Ltd (NASL), a joint venture company formed between NTPC and ABB Alsthom which would undertake R&M activities of power plants, the Union power minister PR Kumaramangalam said this corpus would provide the necessary funds for the renovation of old and ageing power plants.

He said "we are planning to create a Rs 3,000 crore fund from next year that will provide loans and grants for companies undertaking T&D improvement and R&M activities."

He said renovation and modernisation of ageing power plants would not only help increase the plant load factor of the power stations but also enhance the generation capacity.

The corpus forms part of the accelerated power development programme suggested by the Planning Commission to assist states take up various reforms in the power sector including renovation and modernisation plans. As per the special plan assistance 50 per cent will be as grant and 50 per cent as loan to non-special category states and allocation of funds under APDP would be made to the states on the conditionality of undertaking specified reforms and for specific projects.

NASL is a 50:50 joint-venture between NTPC and ABB-Alsthom created with initial authorised share capital of around Rs 50 crore ($ 12.5 million). It has already bagged the R&M deal for the Madhya Pradesh State Electricity Board's Korba power plant.

NASL will only undertake renovation programmes of power stations, distinct from building or operating power projects.

The Power Finance Corporation (PFC) chairman, Uddesh Kohli said the state electricity board has already received a loan of around Rs 600 crore from the PFC for undertaking R&M of old power plants in the state. The loan for renovating the Korba power project alone is around Rs 240 crore.