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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.
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.
February 01, 2021
Will assist in infrastructure creation, provide pre-paid smart-metering and enable systems upgrade
In yet another attempt to save loss-making electricity distribution companies (discoms), the Budget has provided for a reforms-based and result-linked scheme, with an outlay of about ₹3.06-lakh crore over five years.
It will assist discoms in infrastructure creation, including providing prepaid smart metering, feeder separation, and upgrading systems, Finance Minister Nirmala Sitharaman.
Reacting to the announcement, “The distribution segment has been the weakest link in the electrical system and providing assistance for infrastructure creation while tying the support to financial improvements is vital for sustainability,” Association of Power Producers (APP) said in a statement.
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