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CRISIL’s report on state power distribution

India’s state power distribution sector continues to be marred by mounting losses and debt. Rising receivables have caused much concern for entire power value chain.

The central government’s planned reform measures to revive the sector once again, coupled with renewed interest from private players to invest in distribution, makes the availability of a reliable evaluation of the performance of distribution utilities, or discoms, highly pertinent.

CRISIL’s periodic ‘State distribution assessment report’ – through a comprehen-sive and in-depth analysis of 16 states and 40+ distribution entities – provides just this. It shines new insights and takes a well-informed view on the sector’s

Report highlights

• Potential of states*
  Demand growth and capacity mix outlook
  Appetite for incremental power purchase agreements
  *Covers 16 states cumulating to ~80% of India’s power consumption
  
• Ability to service obligations
  Perspectives in terms of payment to creditors
  Evaluation of debt servicing ability
  
• Operational effectiveness of discoms
  Tariff hikes, reduction in aggregate technical and commercial losses and infrastructure improvements
  Outlook on cost profile and average cost of supply-average revenue re-alised, or ACS-ARR, gap
  
• Regulatory environment for assets
  Policy environment in the state (RE adoption, open access, other regula-tory/policy changes)