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India to push ahead with distribution reform
INDIA
INDIAN generator NTPC and Power Grid Cor- poration of India (PGC) have formed a joint venture to create the new National Electricity Distribution Company in a bid to break into the distribution market.
The two state-owned companies, which currently dominate their respective parts of the power sector, aim to supply power directly to consumers in anticipation of further govern- ment reforms that could open up the market to greater competition.
e government is currently dra ing amend- ments to the Electricity Act, 2003 that would separate the “content and carriage businesses in power distribution.” is means that a retail supplier to an end-user would not have to own physical distribution and supply infrastructure.
e government intends the changes to bring more competition in the power distribution sec- tor, where currently regional suppliers operate local monopolies
“An agreement has been entered between Power Grid and NTPC on June 21 for formation of a JV company on 50:50 equity basis for setting up National Electricity Distribution Company
Ltd (NEDCL),” a statement from the Indian Power Ministry said.
e distribution segment is a key weakness of the Indian power industry, with many state- owned distribution companies (discoms) virtu- ally bankrupt because of poor bill collection.
In turn, the discoms are unable to pay gen- erating companies for the power they receive. is has led to unpaid bills and black outs, and has hindered investment in improvements in the distribution and supply sector.
In the year to March 2019, the losses of state- owned discoms grew by 40% to INR 216.6bn ($3.1bn). At the same time, the discoms owed generating companies INR380.2bn ($5.5bn).
The government’s current UDAY reform scheme aims to turn around state-owned dis- coms financially and operationally.State gov- ernments have issued bonds to nance taking over the losses of the discoms, although there has been little operational changes.
The federal government aims to achieve universal access to power. Tackling the dysfunc- tional and virtually bankrupt distribution sector will play a key role in this policy.™
HYDRO
GE, Chinese set to build Zambesi HPP
CHINA
ZIMBABWEAN President Emmerson Mnan- gagwa said that GE Power and Power Construc- tion Corp. of China are to build the 2.4-GW Batoka Gorge hydro project on the Zambezi River.
Mnangagwa was speaking last week in Maputo, although the Zambezi River Authority (ZRA) has yet to o cially announce the award of the $4.5 billion contract.
“Zambia and Zimbabwe have agreed on this project. We have all agreed that we give it to China Power and GE together. It’s critical that we move fast on that front because as we indus- trialise we need electricity,” he said.
e ZRA, which is a joint body run by the Zambian and Zimbabwean governments to oversee the Zambesi River and to operate the Kariba Dam, also shortlisted Salini Impreglilo of Italy and a joint venture of China’s ree Gorges Corp., China International and Water Electric Corp. and China Gezhouba Group.
e ZRA had originally announced the short- list at the start of June, saying at the time that the winner would be announced in September.
e ZRA said that the project would be pur- sued on the Build-Operate-Transfer (BOT) model. e ZRA expects both GE and China Power to provide most of the $4.5 billion needed for the project, while the World Bank and the African Development Bank (AfDB) have said they will nancially support the project.
Zimbabwe and Zambia signed a memoran- dum of understanding (MoU) for the project in February 2012. e AfDB was named as the lead nancier and co-ordinator for the project in April 2017.
The HPP will be built 54 km downstream from the Victoria Falls, and aims to enable both countries to be self-su cient in power in future.
Both countries currently su er from black- outs because of low water levels at the Kariba Dam and other hydro installations. Zimba- bwe is also heavily in debt to South Africa and Mozambique for power imports. Zimbabwe currently has 1,300 MW of installed capacity, while demand reaches 1,900 MW. e project is expected to lower Zimbabwe’s dependence on fossil fuels and reduce its emissions.™
Week 25 25•June•2019 w w w . N E W S B A S E . c o m P7