As Odisha gears up to meet additional power demand of 3517 Mw for rural electrification during the 12th Plan, it is facing a challenge to raise Rs 7500 crore needed to create matching transmission infrastructure.
The additional internal power demand of 3517 Mw is projected to be created by rural electrification taken up under Rajeev Gandhi Grameen Vidyutikaran Yojana (RGGVY) and Biju Gram Jyoti Yojana (BGJY). This is over and above the current peak power demand of the state pegged at 3500 Mw.
To meet the funding constraints, state owned Odisha Power Transmission Corporation Ltd (OPTCL) has forged joint ventures with Power Grid Corporation of India Ltd (PGCIL) and Mahanadi Coalfields Ltd (MCL) to float Kalinga Power Transmission Corporation and Neelachal Power Transmission Corporation respectively. Together, these two JV companies would invest Rs 3500 crore.
This apart, OPTCL is proposing to take up transmission lines of Rs 1000 crore through PPP (public private partnership) initiatives. Global consultants, Ernst & Young (E&Y) and PricewaterhouseCoopers (PwC), are closely working with OPTCL on this initiative.
The balance Rs 3500 crore is required to be invested by OPTCL itself. To meet the funding requirement, OPTCL has mobilized funding from Power Finance Corporation (PFC), Rural Electrification Corporation (REC) and other financial institutions for about Rs 1500 crore.
Despite this, there is still a deficiency of Rs 2000 crore. The state government is considering the possibility of giving grant and soft loan in the ratio of 50:50 for meeting this deficiency as it would not be possible to raise further loan.
“We are looking to meet the funding deficit by obtaining loans from PFC and Japan International Cooperation Agency (JICA). Besides, the state government has committed to give us Rs 300 crore in five equal tranches”, said a senior OPTCL official.
Raising further loan from financial institutions is set to burden the consumers in the form of higher transmission charges. Additional equity is also not desirable as the viability norm of 16 per cent return on equity would increase the tariff.
