MoP issues draft SBDs for discom privatisation

The Ministry of Power (MoP) has drafted a standard bidding document (SBD) for the privatisation of distribution licensees. The SBD contains the format for the request for proposal, the shareholders’ agreement, the share acquisition agreement, and the bulk supply agreement as well as policy directions. The MoP has suggested several options that states can choose from while offering their discoms for privatisation, ranging from no involvement to a minority stake of 26 per cent. The other alternatives are regarding power purchase agreements (PPAs) that would be transferred from the existing discom in an area to the private entity and the bid parameter to be dependent on reduction of losses. This is in line with the central government’s efforts to improve the operations and finances of state discoms.