CHENNAI: To sustain growth and decarbonise the grid, Tamil Nadu requires more than Rs 2 lakh crore investments across the value chain of power generation, transmission, storage and distribution over the next five to seven years, said Electricity Minister S S Sivasankar on Friday.
Speaking at the southern region power ministers’ conference in Bengaluru, Sivasankar stressed that such large-scale investments would not be possible without improving the financial health of power distribution companies (discoms). He urged both the central and state governments to join hands in supporting these reforms.
“A detailed plan to restructure the debt of discoms is the need of the hour. The responsibility of taking over the debt must be shared by both centre and states. This scheme should be linked to financial reforms to ensure accountability and prevent further losses,” he added.
He also called on all stakeholders to press for dedicated grants for the power sector in the recommendations of the 16th Finance Commission, which is currently working on the public finance road map for the next five years.
Highlighting the state’s contribution, Sivasankar said the Tamil Nadu government has provided nearly Rs 53,000 crore in subsidies and Rs 52,000 crore in funding losses to the Tamil Nadu Power Distribution Corporation Limited (TNPDCL) in the past four years. “This shows our commitment to providing reliable and affordable electricity to the people,” he said.
The minister said Tamil Nadu has made strong progress in reducing power losses. The state brought down Aggregate Technical and Commercial (AT&C) losses from 19.47% in 2017-18 to 11.39% in 2023-24, leading to significant financial savings.
He also pointed out that Tamil Nadu is the first state in the country to implement a Multi-Year Tariff system, linked to the Consumer Price Index. This system ensures a steady annual tariff adjustment for five years and has helped control rising losses.
Sivasankar also urged the centre to cut interest rates charged by the Rural Electrification Corporation and Power Finance Corporation by at least 1.5%.
Union Ministers Manohar Lal and Shripad Yesso Naik, energy ministers from southern states as well as senior officials were present at the conference.