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INDIAN ENGINEERING: Finance Ministry approves National Electricity Fund; Positive for T&D equipment companies

In a recent development, The Union Finance has approved the creation of a Rs.500b National Electricity Fund (NEF).

The idea for creating such a fund was originally mooted to help the loss-making State Electricity Boards (SEBs) improve their finances.

According to the report of the Working Group on Power for the XIth plan submitted in Feb 2007, AT&C losses range between 18% and 62% in various states.

The average AT&C loss in the country is at 34 per cent. According to the report, 1% reduction in T&D losses would generate saving of over Rs.7-8b.

Alternatively, reduction of such loss to around 10% would release energy equivalent to an additional capacity of 10,000-12,000 MW.

Top T&D Picks: Siemens, Crompton Greaves Other beneficiaries: Substation EPC companies (ABB, Areva, KEC, Kalpataru Power, Jyoti Structures, Bajaj Electricals), LV Transformer manufacturer, meter manufacturers (Genus), Cable manufacturers (Havells, Finolex), etc. It will also allay fears of any default of SEBs and provide them with more spending power. Positive for REC, PFC.