Deloitte and SBI Capital Markets have been appointed as consultants to help with the privatisation of Union Territories’ electricity distribution companies (discoms).
The state-run Power Finance Corporation (PFC) has appointed Deloitte to help with the sale process to privatise discoms in the three Union Territories namely Puducherry, Chandigarh and Andaman & Nicobar Islands; while SBI Capital Markets has received the mandate for Dadar and Nagar Haveli, Daman and Diu, Jammu & Kashmir and Ladakh.
The companies have been appointed to help with the preparatory work for the exercise that is expected to be completed by December 2020. The mandate is to complete the exercise within eight months starting June 2020. These discoms have an enterprise value of about USD 700 million.
The Union Power Ministry will issue the standard bidding documents for the same. With the electricity load for Lakshadweep Islands being low, it is currently not being considered for privatisation.
Unlike discoms in the states, which fall under the remit of the respective state governments, there is a separate dispensation for discoms in the Union Territories, as they are administered directly by the Central government.
Local companies such as state-run NTPC, electricity generation and distribution company CESC, Torrent Power, Greenko Group, Tata Power, National Investment and Infrastructure Fund (NIIF) and Adani Group have shown interest in the assets.
Foreign utilities such as Italy’s Enel Group, Malaysia’s Tenaga Nasional Bhd, Electricite de France SA and Hong Kong’s electricity provider China Light and Power Company are also expected to participate. Moreover, Brookfield Asset Management, CDPQ, CDC Group, Macquarie Group and Actis are also likely to participate.
The Union government had announced Rs 90,000 crore loan for fund-starved electricity discoms against their receivables as part of Rs 20 trillion stimulus.
