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Reforms boost investments in Andhra's power sector

Our Correspondent in Hyderabad

The power sector reforms in Andhra Pradesh have boosted foreign and domestic investments in the transmission and distribution sectors, according to state government sources.

"The reforms have kindled investor interest. Investors are eager to invest in AP's power sector," said A K Kutty, chairman and managing director, the Transmission Corporation of Andhra Pradesh.

The World Bank has agreed to lend up to Rs 40 billion for transmission and distribution improvements and augmentation of systems over the current decade. "This (amount) will be given as a series of loans under the Adaptable Programme of Lending. The first loan of Rs 8.9 billion has already been sanctioned and is being used to remove the critical bottlenecks in the transmission and distribution system," Kutty said.

Among other things, establishment of new substations and reinforcement of overloaded lines and substations is being taken up. Capacitors are being installed all over the state under the Power Finance Corporation and World Bank schemes for line loss reduction and voltage improvement.

The Department for International Development, the UK, has sanctioned Rs 3.46 billion as a grant for revamp of the distribution system. It is also providing another Rs 1.96 billion as a technical assistance grant to the power sector.

The Overseas Economic Cooperation Fund, Japan, has sanctioned funds to the extent of Rs 3.9 billion for the power evacuation scheme from Srisailam power house and Rs 3.11 billion towards the power evacuation scheme from Simhadri thermal power project near Visakhapatnam.

The Canadian International Development Agency has provided a technical assistance grant of Canadian $ 4 million for in-depth technical studies on load forecasting, investment planning, etc, from March 1999 to December 2000. The CIDA has also agreed to provide further funding for additional areas of work spanning up to September 2000.

The PFC is extending support for counterpart-funding of Rs 1.13 billion for the projects funded by World Bank and OECF. The PFC has also sanctioned a loan of Rs 2.4 billion for the year 1999-2000 for transmission and distribution schemes.

The Rural Electrification Corporation has earmarked Rs 3.46 billion for the year 1999-2000 for APTransco for rural electrification works. The REC has also accepted rescheduling of outstanding loans.

With these funds, system augmentation and improvement have been taken up on a massive scale to improve the quality and reliability of supply all across the state. Phenomenal impetus has been given to improvement works in transmission and distribution system to tackle the operational problems.

It may be recalled that Andhra Pradesh enacted the AP Electricity Reforms Act in 1998. As part of the reforms process, the generation, transmission and distribution activities have been unbundled and two new corporations -- the Andhra Pradesh Power Generation Corporation and the Transmission Corporation of Andhra Pradesh -- have been brought into existence from February 1, 1999.

The two corporations have become fully operational with full-fledged management. The reforms process was carried forward during the year with the appointment of the AP Electricity Regulatory Commission.

Business

Andhra Pradesh