Tata Power gets Letter of Intent for the acquisition of CESU Power Distribution in Odisha

Tata Power gets Letter of Intent for the acquisition of CESU With the acquisition of CESU, Tata Power’s consumer base would double and increase to 50 lakhs

December 23, 2019. By Hemant Arora

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The Odisha Electricity Regulatory Commission (OERC) awarded the Letter of Intent (LOI) to The Tata Power Company Limited informing the Company’s selection as the successful bidder to own the licence for the distribution and retail supply of electricity in Odisha’s five circles, together constituting Central Electricity Supply Utility of Odisha (CESU).

The five electrical circles constituting CESU are the areas of Bhubaneswar (Electrical Circle - I and II), Cuttack, Paradip and Dhenkanal. The license is being offered for 25 years initially. 

CESU is spread over 30,000  Sq km with population of over 1.4 Crore and consumer base of 2.5 million. The average demand of CESU is around 1,300MW with the annual input energy of 8,400MUs (FY 2018). Presently, Tata Power has total consumer base of 2.5 million across Mumbai, Delhi and Ajmer and with acquisition of CESU, its consumer base would double and touch 5 million consumers.

The proposed sale of CESU to Tata Power will be through the formation of a special purpose vehicle entity. Tata Power has been informed that Government of Odisha will  own 49% equity stake in the proposed SPV and Tata Power will hold 51% equity with their management.

Tata Power has several successful public-private partnerships in generation, transmission & distribution in the country. Recently, our focus has been on increasing the Company’s existing footprint in distribution of electricity through Public-Private-Partnerships (PPP) with discoms. This tie up with CESU is the latest such partnership in the distribution business,” said Mr Praveer Sinha, CEO & MD, Tata Power.

 “We hope to transform Odisha distribution system with 24 x7  reliable power  and unmatched customer services  with extensive social engagement using our existing experience in distribution of electricity in Delhi, Mumbai and Ajmer,” said Mr. Sanjay Banga-President-T &D, Tata Power.

Tata Power has vast experience in power distribution sector  with its presence in Mumbai, Delhi and Ajmer. Tata Power has been a benchmark performer in Delhi, wherin similar PPP model was formed after privatisation of Delhi Vidyut Board in 2002 . AT&C  losses have been brought down from a high of 53% in 2002 to around 8% .

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