Power Finance expects Rs 10 B net profits

Wednesday, 26 February 2003, 08:00 Hrs
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NEW DELHI: The state-owned Power Finance Corporation (PFC), which provides funding for initiating government and private sector projects, is expecting a 30 percent increase in net profits for the 2002-03 fiscal.

"We hope to give close to 65 billion as loan disbursement and have in addition sanctioned loans worth 120 billion for the 2002-03 fiscal. After paying taxes, we are expecting 10 billion in net profits," PFC chairman and managing director A.A. Khan told IANS.

PFC made a net profit of 7.5 billion during 2001-02 and 6.04 billion in the year before that, Khan said, speaking on the sidelines of a workshop organised Tuesday to study new developments in metering and billing.

"For capacity addition, we are giving a thrust to projects that involve the expansion of existing power plants, as these are quicker and involve less cost.

"Several such projects are under way in places like Suratgarh, Panipat and Raichur. In addition, we have decided to provide funding for capacity addition through non-conventional energy sources like biomass and wind power," said Khan.

PFC has decided to give more funding to power utilities that show a commitment to making their operations viable and adopt IT applications to this end.

"In states where unbundling (privatisation) of the power sector is being done, like in Andhra Pradesh, we are supporting them with funding. In Andhra Pradesh, we have provided part of funding for a World Bank aided project," he said.

To help PFC fund projects, rating agencies Crisil and ICRA have conducted a study on state electricity boards (SEB) and the risks involved in funding.

"Where we find efforts being made by SEBs (state electricity boards), we take the risk of funding projects. Our criteria is whether an SEB has in place a reform oriented 'operation financial action plan' that has the approval of the state government," he said.

With hidden liabilities of SEBs coming to the fore, the government estimates that the losses of state power utilities has now risen to 300 billion.

To check the losses, PFC has decided to encourage efforts towards energy auditing and power accounting by SEBs "so that they know at least the power being generated and the consumption. This would enable SEBs to know where losses are occurring and plug the leaks by metering and proper billing," Khan said.

Khan said IT applications would provide the means of ensuring proper accounting to ensure that not only is proper metering done but dues are recovered as well.

"Through IT applications, it would be possible to have proper metering and billing with the least intervention of SEB personnel, thereby plugging the leak, specially in the case of major consumers of power where even 10 percent saving could mean a big difference," said Khan.

Power-starved India estimates that between 40 and 50 percent of the power available in states is stolen. To meet the projected demand, India is attempting to double the generation capacity by adding 100,000 MW by 2012.

While lack of proper metering is the main reason for thefts and non-payments, Khan said, the plan to have efficient metering across India would be a wasted effort unless timely billing is done and followed up with collection of dues.
Source: IANS
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