Rajasthan Likely To Get Us $1 Billion Wb Loan
World Bank is likely to sanction a loan of US $1 billion for the power sector in Rajasthan. It is understood that the loan will be received by the state within a period of 8-10 years.
The loan will consists of an investment loan of US $600 million, a sectoral adjustment loan of US $200 million to the state government and assistance of US $50-200 million to the privatised distribution companies from the International Finance Corporation (IFC), a member of the World Bank group.
According to sources in the state power ministry, the loan is expected to be provided in 3 installments. The first chunk of US $160 million, about 30 per cent of the total loan, is expected to be granted by the end of this year.
Negotiations for the same are slated to be held in October, 2000, the sources said. The government is expected to utilise this loan for expansion and strengthening of transmission and distribution network in the state.
Significantly, Rajasthan is the first and so far the only state in the country to have restructured the power sector in one stage with the simultaneous formation of the generation, transmission and regional distribution companies.
In all other states where the restructuring of the power sector has been completed, namely Orissa, Haryana and Andhra Pradesh, the generation functions were separated first keeping the transmission and distribution together and in the second stage distribution functions were segregated with the formation of the regional distribution companies.
With the accelerated approach and bold initiatives, the state has been able to completely restructure its power sector in just 14 months of the issue of the policy statement.
During the last one year since the issue of the policy statement in July, 1999, the state has taken significant strides on the power reforms agenda, the sources pointed out.
After the passing of the reforms bills by the state legislature in September, 1999, the state has restructured the entire power sector in one go.
In July, 2000, the government of Rajasthan issued a gazette notification unbundling Rajasthan State Electricity Board (RSEB) into Rajasthan Rajya Vidyut Utpadan Nigam Limited for generation; Rajya Vidyut Prasaran Nigam Limited for transmission and the three regional distribution companies namely Jaipur Vidyut Vitran Nigam Limited; Ajmer Vidyut Vitran Nigam Limited and Jodhpur Vidyut Vitran Nigam Limited.
The state government had earlier in March, 2000, approved a financial restructuring for the power sector. The sources pointed out that the state government apart from agreeing to clean up the balance sheet has also agreed to provide a net cash support of Rs 2,448 crore to the unbundled entities over the next 4 years.
The state, the sources said, has also accelerated its divestment programme for the distribution companies. While the policy statement issued in May 1999 envisaged private participation in distribution companies to be taken up in stages and to be completed by 2004.
The divestment in all distribution companies is now being taken up and is targeted to be completed by 2002, the sources said.
The state will be offering majority equity to the strategic partner for the distribution companies who will also get the management control.
The government is already in the process of engaging a consultant for selection of the joint venture partner for distribution. The process of election is expected to be completed by December, 2000, the sources said.