Bengal discom banks on distribution overhaul with World Bank loan to optimise cost of supplies

West Bengal State Electricity Distribution Company (WBSEDCL) is now pinning hope on World Bank’s (WB) $400 million or around Rs 3,000 crore loan to overhaul its entire distribution network, which would help in optimising the cost of supplies to its 1.80 crore consumers, much required for financial sustainability.

The state discom, already ladened with a repayment obligation of Rs 8,750 crore for the current year, including its dues to the state gencos (Rs 5,000 crore), has recently taken a transit loan of Rs 1,022 crore from the Centre to tide over the liquidity crunch arising out of realisations, as low as Rs 350 crore against the regular realisation of Rs 1,500 crore, during the lockdown period.

The discom’s total debt, including market borrowings, regulatory debt and working capital loans stands at above Rs 18,700 crore. But the WB loan was essential to implement the grid modernisation programme as a long-term solution, an official said. The state government has already tied up with the WB loan and its arm, International Bank for Reconstruction and Development (IBRD) to provide $280 million, the official added.

Low paying consumers, making 90% of the total consumer base, contributes only 40% of the retail sales. Such consumers doubled in the last six years leading to aggregate technical and commercial (AT&C) losses to the tune of 27%.

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