‘Proposed NPDC imperative to bring changes in power distribution’

Source: The Hitavada      Date: 28 Jun 2018 12:28:23




THE proposed national power distribution company is imperative to bring structural changes in power ecosystem, India Ratings and Research (Ind-Ra) said on Wednesday.The Central Government is reportedly contemplating on forming a national power distribution company (NPDC) to streamline the ailing power distribution network in the country, which is currently operated by state distribution companies (discoms), the ratings agency said in a statement.The proposed NPDC’s scope may complement technical and implementation capabilities of discoms, specially in implementing the Central Government schemes in the power sector, it said.

The NPDC can co-exist with state discoms and own networks, and distribute power, forcing state discoms to increase their operational efficiency and doing away with political influences.
A Central Government-backed counterparty will enable many existing power projects, including small scale, to access the capital market and avail fixed-interest bonds for a long tenure, Ind-Ra observed. It will address counterparty-related risks and help generation companies in gaining better credit ratings at a standalone level. At present, the credit ratings of existing power projects are capped at a certain maximum level by credit rating agencies, considering the weak financial position of state discoms and delays in payables to generators.The proposed NPDC would help in developing an alternative to these state-owned discoms for power generators and will uplift the whole sector sentiment.