UP Plans Privatisation of Two Power Distribution Companies

14 Jan 2025 CW Team

Uttar Pradesh is considering the privatisation of two of its four power distribution companies, according to a state government tender. This move comes as the country's most populous state faces challenges with power losses and insufficient transmission infrastructure.

The state government has invited private companies to either form partnerships with or fully privatise the state-owned Dakshinanchal Vidyut Vitran Nigam and Purvanchal Vidyut Vitran Nigam, as indicated in the tender issued on January 12.

Many state power distribution companies across India are experiencing financial losses due to outdated power transmission systems and frequent power failures. As a result, the government is seeking to involve private players in the sector.

Dakshinanchal Vidyut Vitran Nigam and Purvanchal Vidyut Vitran Nigam are each responsible for power distribution in 21 districts of Uttar Pradesh.

In response to the increasing investment demand in the power sector and the need to upgrade the transmission infrastructure to accommodate more renewable energy, the country's power minister urged states last year to identify and list their profit-making power utilities on the stock exchange.

Delhi, the capital of India, and the eastern state of Odisha already have public-private partnerships for power distribution.

Tata Power, a prominent private company in the Indian power distribution sector, operates in Odisha, Delhi, and Mumbai.

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