India's discom reform plan to benefit gencos in long term: Fitch
ANI |
Updated: Feb 02, 2021 12:05 IST
Singapore, Feb 2 (ANI): India's proposed plan to improve operations and finances of state-owned distribution companies (discoms), the weakest link in power supply value chain, will help mitigate cash flow stress observed in rated power generation companies (gencos) over time, according to Fitch Ratings.
The 41 billion dollar plan intends to trim electricity losses, gradually narrow discoms' cost-revenue gap, improve the reliability and quality of power supply, and promote more sustainable competition in the sector over FY22 to FY25 (fiscal years ending March 2022-2025).
Fitch said discoms are saddled with huge accumulated losses due to a combination of crippling debt, expensive power, technical and commercial losses, and less-than-commensurate increases in tariffs.