Tata Power gets LoI for acquisition of CESU power distribution in Odisha

The Odisha Electricity Regulatory Commission (OERC) has awarded a letter of intent to Tata Power Co Ltd after it emerged as the successful bidder to own the licence for distribution and retail supply of electricity in Odisha's five circles together constituting the Central Electricity Supply Utility (CESU).

The five electrical circles constituting CESU are the areas of Bhubaneswar (electrical circle one and two), Cuttack, Paradip and Dhenkanal. The license is being offered for 25 years initially.

CESU is spread over 30,000 sq km with a population of over 1.4 crore and a consumer base of 25 lakh. The average demand of CESU is about 1,300 megawatts with the annual input energy of 840 crore units (FY 2018).

Presently, Tata Power has a total consumer base of 25 lakh across Mumbai, New Delhi and Ajmer. With the acquisition of CESU, its consumer base will double and touch 50 lakh consumers.

The proposed sale of CESU to Tata Power will be through the formation of a special purpose vehicle (SPV) entity. The state 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.

"Tata Power has several successful public-private partnerships in generation, transmission and distribution in the country," said Praveer Sinha, CEO and Managing Director of Tata Power.

"Recently, our focus has been on increasing the company's existing footprint in distribution of electricity through public-private partnerships with discoms. This tie-up with CESU is the latest such partnership in the distribution business," he said in a statement.

Tata Power is India's largest integrated power company. Together with its subsidiaries and jointly controlled entities, it has an installed capacity of 10,763 megawatts.