- The announcement to acquire 99% stake in C&S Electric comes in the backdrop of the NDA government’s ₹2.86 trillion plan for India’s most ambitious distribution reform scheme
- Some Indian states are recording power distribution losses of as high as 50%
Attracted by India’s electrification drive, Siemens AG will acquire New Delhi-based C&S Electric Limited for around Rs.2,100 crore (euro 267 million).
The announcement to acquire 99% stake in C&S Electric comes in the backdrop of the National Democratic Alliance (NDA) government’s ₹2.86 trillion plan for India’s most ambitious distribution reform scheme, that involves reducing electricity losses to less than 12%, negating tariff gaps and having compulsory prepaid smart metering across the power distribution chain including 250 million households.
The scheme, tentatively named Atal Distribution System Improvement Yojana (ADITYA) after former prime minister late Atal Bihari Vajpayee, is aimed at ensuring continuous power supply to all residents involves adopting models such as privatizing state-run power distribution companies (discoms) and having multiple supply, network and distribution franchisees.
“The acquisition of one of the leading providers of electrical and electronic equipment for infrastructure, power generation, transmission and distribution, will strengthen Siemens’ position as a key supplier of low-voltage power distribution and electrical installation technology in one of the world’s fastest-growing economies,” Siemens said in a statement.
Some Indian states are recording power distribution losses of as high as 50%. Electricity discoms are the weakest link in the electricity value chain, plagued by low collection, increase in power purchase cost, inadequate tariff hikes and subsidy disbursement, and mounting dues from government departments.
“The scope of the acquisition comprises the Indian operations of C&S Electric’s low-voltage switchgear components and panels, low and medium voltage power busbars as well as protection and metering devices businesses.
Other businesses of the company such as medium voltage switchgear and package sub-station, lighting, diesel generating sets, EPC (Engineering, Procurement and Construction) and the Etacom busbars business will be retained by the owners,” the statement added.